(To read more on the multifamily market, click here.)

HORSHAM, PA-Although locally based Toll Brothers Inc. ended its fiscal fourth quarter with a 72% hike in net income--a record--it sticks with an earlier forecast that calls for a reduction in home sales in 2006. During fourth quarter, only the California market registered a decline in closings, contracts and backlogs for the company.

Although closings in the mid-Atlantic region rose 16% for the quarter, contracts dropped 10% in the four states of Pennsylvania, Delaware, Maryland and Virginia. The southeastern states of Florida and the Carolinas remained strongest for the company. A Dec. 8 report by Credit Suisse First Boston stated that the dollar value of Toll Brothers' home orders rose 4% during the quarter, the slowest growth since second-quarter 2003.

During a conference call, Robert Toll, chairman and CEO, said the increases of 2004 "and most of 2005 were not sustainable and were fueled in part by speculation. We look to the future with cautious optimism. We believe demand for our luxury homes relies, in large measure, on consumer confidence, which has suffered recently among our clientele. We also believe that the fundamental imbalance between supply and demand will reassert itself."

Toll Brothers' fourth-quarter profits were $310.3 million, and revenue climbed 40% to just above $2 billion, versus nearly $1.5 billion for the same quarter a year ago. For 2007, Toll said the company anticipates "record results," but added, "these are uncertain times and results could prove better or worse than the previous guidance we gave of 20% growth for fiscal 2007."

Shares of TOL opened trading on the NYSE on Dec. 9 at $35.28 a share, down pennies from $35.55 at the Dec. 8 close of the market. The 52-week high of $58.67 a share occurred on July 20 this year, and the 52-week low, $30.78 a share, occurred on Dec. 10, 2004.

Instant Insights /

Despite Record-Breaking Q4, Toll Bros. Cites Weakening Market

Related Stories

Recommended For You