Luxury homebuilder Toll Brothers reports narrower loss for first quarter

Toll Brothers posts $41 million loss in fiscal Q1

HORSHAM, Pa. — Toll Brothers Inc. said the slow recovery of the housing market helped the luxury homebuilder post a narrower loss in its fiscal first quarter.

The company said Wednesday it lost $40.8 million, or 25 cents a share, in the three months ended in January. That compares with a loss of $88.9 million, or 55 cents a share, in the prior-year period.

Revenue declined 20 percent to $326.7 million from $409 million the year before.

Analysts polled by Thomson Reuters were expecting a loss of 35 cents a share on revenue of about $325 million.

The most recent quarter included before-tax write-downs of $33.4 million, compared with year-ago reductions of $156.6 million.

“The housing market took several years to recover following the downturn of the late 1980s and early 1990s, Robert Toll, chief executive officer, said in a statement. “We expect this recovery to follow a similar pattern. We believe the housing market is still in choppy waters but the seas are getting calmer.”

On Wednesday morning the Commerce Department is set to release industry sales data for January. Analysts are expecting a 5.3 percent increase in new home sales over December’s sharp decline. On Tuesday, a new report showed a seven-month trend of rising home prices.

The market, however, is being propped up by unprecedented federal programs. The Federal Reserve is working to keep mortgage rates in the 5 percent range. At the same time, the government is offering temporary tax credits for homebuyers.

Both programs will end this spring, yet the backlog of foreclosures coming onto the market will continue to temper the rebound. High unemployment and tight lending standards are also keeping buyers at bay.

Toll Brothers sold 596 homes during the latest quarter, a 10 percent decline from the first quarter last year.

Last week, however, the builder launched its annual winter sales event. The company said more homebuyers put down deposits than any week in February since 2006.

The company, based in Horsham, Pa., took advantage of cheaper land prices and struck deals for 3,000 lots for future homes during the quarter. Toll said it could end the year with more than 210 communities around the country, up from the current 190.

Based on recent shopping activity, the company estimated it will sell between 2,100 and 2,750 homes in its fiscal year at an average price of $540,000 and $560,000.

In premarket trading, Toll Brothers shares were up 65 cents from Tuesday’s close, to $19.55.

On the Net:

Toll Brothers: www.tollbrothers.com