Toll Brothers Down after Reporting Loss

Toll Brothers, Inc. (NYSE:TOL) shares are falling over 4% in morning trade after the company reported a quarterly loss versus Wall Street expectations for a profit. The Company reported a FY 2012 first-quarter net loss of $2.8 million, or $0.02 per share diluted, compared to FY 2011′s first-quarter net income of $3.4 million, or $0.02 per share diluted. Analysts were looking for earnings of 3 cents a share.

Toll Brothers’ first-quarter revenue fell to about $322 million from $334.1 million a year earlier. Home deliveries dropped to 564 units from 570 units. This was also worse than Wall Street expectations. The company also took pretax write-downs on inventory of $8.1 million.

Douglas C. Yearley, Jr., Toll Brothers’ chief executive officer, stated: “The past few months have been very exciting for Toll Brothers. Our total and per-community contracts were the highest for a first quarter in five years. At first-quarter end, the value of our backlog was up 35% and our community count was up 14% compared to one year ago”.

“Although historically, our first quarter is the most challenging time to gauge sentiment among home buyers, in general the market feels healthier than it did one year ago. The urban metro New York City market remains very strong. We are also encouraged by the continued health of the Washington, DC-to-Boston corridor, along with Houston, Dallas, Raleigh, and more recently Southern California. We are even seeing some recovery on the east coast of Florida and in the suburbs of Detroit and Phoenix”

Robert I. Toll, executive chairman, stated: “Since the new home industry is coming off several years of historic low levels of production, we are encouraged by the recent improvement in housing starts. As announced last week, nationally, January 2012 housing starts (seasonably adjusted) were up 10% compared to January 2011. Some big public builders, such as Toll Brothers, appear to be gaining market share as their order numbers have grown more rapidly than housing starts in general. These large builders benefit from access to capital and more marketing firepower.

“We believe this is most pronounced in the luxury market where our brand is firmly entrenched. Consistent with previous cycles, we believe we are benefiting from a flight to quality. Buyers are gravitating to our brand, the quality and value of our homes, our strong balance sheet and our track record. With our solid land position and well-located communities, we believe we are well-positioned as the market recovers.”

More Posts by this author

• 
  Stocks Headed for a Higher Finish
• 
  Gold and Silver Prices Continue to Climb
• 
  Stocks Sharply Higher in Mid-Day Trading
• 
  Endologix – In 2011 continued to capture market share
• 
  Polypore International – Another year of solid growth
• 
  LodgeNet Interactive Corporation – Gratified that Omni is endorsing our Envision platform
• 
  Target Steady after Raising Full Year Profit Outlook

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.