Toll Brothers Inc. says it lost $472.3 million in its fiscal third quarter, as the luxury homebuilder took a large tax hit.
But while Toll Brothers’ results were worse than analysts expected, the company is seeing signs of improvement in many markets. Nationally, new home sales have risen for four months in a row.
The builder said Thursday it lost $2.93 a share in the three months ended July 31. That compares with a loss of $29.3 million, or 18 cents a share, the same period last year.
Toll Brothers sold 792 homes with revenue totaling $461.4 million. Those results were down 36 percent and 42 percent, respectively, from the third fiscal quarter last year.
Analysts polled by Thomson Reuters were expecting a loss of $1.79 a share on revenue of about $460.2 million
Toll took a $439.4 million non-cash deferred tax allowance and write-downs totaling $115 million in the quarter. Excluding those charges, the company would have earned $3.7 million in the most recent quarter.
And the current quarter is looking even better. The number of buyers putting down deposits for a new home is running 26 percent ahead of the year-ago period.
While market conditions are still tough, “We do see signs for optimism,” Robert Toll, chairman and CEO, said in a statement.
The company’s cancellation rate of 9 percent, for example, is the lowest in three years. The company’s backlog of orders increased compared to the prior quarter, another three-year milestone. And sales in its current communities are a third ahead of last year.
When Toll gave investors a sneak peak at sales results earlier this month, he highlighted several markets that were showing signs of recovery: the New York suburbs; Jersey City, N.J.; Raleigh, N.C.; Washington D.C.; as well as some areas of Virginia, Connecticut, Florida, Delaware and northern California.
“The rest of the markets are either stuck in the mud or improved marginally,” Toll told Wall Street analysts.
In morning trading, Toll Brothers shares were down 73 cents at $22.41.
On Wednesday, the Commerce Department reported sales of new U.S. homes surged almost 10 percent in July, another sign the housing market is climbing back from the historic bottom it reached early this year.
In a kind of Cash for Clunkers effect, homebuyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price, or up to $8,000, for first-time owners. Home sales must be completed by the end of November for buyers to qualify.
Builders and real estate agents are pressing Congress for that credit to be extended. If it isn’t, there is a risk sales could reverse their upward trend.
Copyright 2009 The Associated Press.