Toll Brothers Inc.'s fiscal third-quarter net fell 85% as the luxury-home builder recorded more land writedowns amid continued slowing in new home construction.
Chairman and Chief Executive Robert Toll said in a statement that the builder had experienced "a much higher rate of cancellations than at any time in our 21-year history as a public company" due to the downturn in the housing market.
For the quarter ended July 31, the Huntingdon Valley, Pa., firm posted net income of $26.5 million, or 16 cents a share, compared with $174.6 million, or $1.07 a share, a year earlier. The latest quarter's results included pretax writedowns of $147.3 million. Toll said two weeks ago it would record pretax writedowns of $125 million to $175 million as home builders lower the value of undeveloped land on their books. Excluding writedowns, earnings for the fiscal third-quarter would have been 70 cents a share, the company said. The mean estimate of analysts polled by Thomson Financial was for a loss of 2 cents a share.
Although this should not surprise anybody, it's still important news. Anyone who starts to say the housing mess is bottoming should be shot at this point.