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

HORSHAM, PA-Toll Brothers’ third-quarter net income, revenues and backlog reach their highest point in the company’s history. During a conference call, Robert I. Toll, chairman and CEO, attributed the results to “our strong land position and the pricing power we enjoy in our affluent markets.” He also said the homebuilder is “on tract for our 13th consecutive year of record earnings” in 2005 and projected net income growth of approximately 20% in both 2006 and 2007.

At the same time, however, Toll acknowledged wariness among investors. “In recent weeks, it appears that bubble mania and reports of a strengthening employment picture with associated interest rate fears have rattled investors,” he said. To counter such fears, Toll pointed out that projected Fed Funds targets of about 4.5% is below its peak in 1999 through 2000, “all years of record growth for Toll Brothers. . . . the basic fundamentals of wealth accumulation, constrained lot supplies and growing demand should support our business model.”

Following the conference call and earnings report on Thurs., Aug. 25, however, shares of Toll Brothers stock continued their downward trend, dropping $1.90 a share to close at $48.10 a share. The 52-week high of $58.67 a share was reached on July 20 this year.

The company’s third-quarter revenues rose 54% to nearly $1.6 billion, and net income rose 103% to $215.5 million. Backlog at the end of the quarter was just over $6.4 billion, an increase of 48% over the same quarter a year ago, and contracts were up 19% to just over $1.9 billion. Joel Rassman, CFO, said the company expects to deliver between 2,750 and 2,850 homes in this year’s fourth quarter at an average price of between $675,000 and $685,000.

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