The stock market was down 300+ points. Mostly as a result of a larger than expected unemployment report fromt he governement.
Hpwever a weak demand for new homes forced the builders to mark down the value of its land and unsold homes.
Toll Brothers reported earnings yesterday which sent shockwaves throught Wall Street about the current state and future of the housing sector.
But Chief Executive Robert Toll is seeing signs the market is stabilizing -- the company had the lowest contract cancellation rate in more than two years, and more buyers are putting down deposits.
"We believe that there is pent-up demand," Toll said in a statement, but noted the housing market won't begin to recover until the trove of foreclosed homes on the market are sold.
"Unfortunately, we can't predict when that will occur," he said.
The Horsham, Pa.-based builder lost $29.3 million, or 18 cents a share, in the three months that ended July 31. That's a reversal from a profit of $26.5 million, or 16 cents a share, in the year-ago quarter.
Toll absorbed $84.3 million in after-tax write-downs in the quarter. Excluding the charges, earnings were $55 million, or 35 cents a share, and in line with Wall Street estimates.
Quarterly revenue fell 34 percent to $797.7 million from $1.21 billion, as revenue from completed contracts declined.
Still, investors were disappointed. Toll's shares fell 81 cents, or 3.3 percent, to $23.99 in morning trading.
Like other homebuilders, Toll's business has suffered through the third year of a housing market downturn the CEO called the worst in the company's history. Home sales are declining in the face of competition from heavily discounted foreclosed properties, tougher mortgage lending standards and lagging consumer confidence.
Comments(0)