Toll Brothers gets more for homes, posts profit
Luxury homebuilder Toll Brothers (TOL-N) reported a quarterly profit as it offered fewer buyer incentives and benefited from a tax break.
The company, whose shares rose more than 3 percent, was also able to finish selling certain less-profitable communities, which boosted its margins.
Toll reported a profit of $3.4 million US, or 2 cents per share, for the first quarter ended on Jan. 31, compared with a year-earlier loss of $40.8 million, or 25 cents per share.
Analysts on average were expecting a loss of 7 cents a share, according to Thomson Reuters I/B/E/S. It was not immediately clear whether that figure compared directly with the reported number.
Revenue rose 3 percent to $334.1 million, compared with analysts' estimates of $317.2 million.
The company's average home price rose 7 percent to $586,000, but Toll expects that to decline to within a range of $540,000 and $565,000 for the rest of the year.
In the fifth year of the housing slump, most homebuilders continue to suffer as they compete in a market oversupplied with cut-rate foreclosures and short sales that are a legacy of a housing boom fueled by subprime lending and speculation.
While Toll's high-end products do not compete as directly with foreclosures as some rivals, which focus on the first-time homebuyer, the company is still struggling to close sales with buyers concerned that the home will lose value.
The S&P/Case-Shiller Home Price Index fell by 3.9 percent in the fourth quarter.
"The market is still tough; the home buyer is still wary," Toll Chief Executive Officer Doug Yearley Jr. said in a statement.
The latest results include a tax benefit of $20.4 million. Without that, the company lost $17 million, compared with a year-earlier loss of $56.8 million, excluding special items.