Toll Brothers Profits Slide But Sees Stabilization

Horsham, PA, Aug. 27, 2009--Luxury homebuilder Toll Brothers reported a third quarter net loss of $472.3 million, or $2.93 per share.

Toll said that excluding write-downs, its pre-tax earnings were $3.7 million.

A year ago, Toll reported a net loss of $29.3 million, or $0.18 per share. Excluding write-downs, last year's third-quarter pre-tax earnings were $84.6 million.

For the first nine months of its fiscal year, Toll reported a net loss of $644.4 million, or $4.00 per share, compared to a loss of $219.0 million, or $1.38 per share a year ago.

Sales for the period were $461 million, compared to $797 million last year.

"While our FY 2009 third-quarter results reflect continuing challenging housing market conditions, we do see signs for optimism," said CEO Robert Toll.

"As recently reported, for the first time since our FY 2005 fourth quarter, our third quarter total net signed contracts were ahead in units compared to one year ago: With 22% fewer selling communities during the quarter, that translated to a 32% improvement in per-community net signed contracts in FY 2009's third quarter versus FY 2008's third quarter.

"For the first time in three years, the number of homes in our backlog grew compared to the prior quarter, reversing a 12-quarter trend. And, four weeks into our fourth quarter, our per-community deposits, the non-binding precursor to signed contracts, are running 26% ahead of last year's comparable period."

Toll said he believes that declining cancellations and more solid demand indicate that the housing market is stabilizing, although it's still a buyer's market.