Hal-le-lu-jah!
Hal-le-lu-jah!
Housing mar-ket
…
May be stable now …
Let's all buy lux'ry homes!
I can just hear housing optimists singing this rendition
of Handel's "Messiah" after
Toll Brothers (NYSE: TOL) CEO Bob Toll's
remarks in recent weeks. Luxury homebuyers are purportedly
easing back into the market. With more new deposits, fewer
cancellations, and cutbacks on incentives and price
reductions, is it possible we've already hit
bottom? Mr. Toll certainly thinks we have.
Toll Brothers' fiscal third-quarter results weren't
exactly pretty. Non-cash writedowns and big deferred tax
asset valuation allowances did some damage, but the company
should get some of it back in future years.
Toll Brothers lost $472.3 million, or $2.93 per share, in
its third quarter, versus analyst estimates of a loss of
$1.79. That compares with a loss of $29.3 million, or $0.18
per share, in the same period last year. Revenues were down
42% to $461.1 million, and home deliveries fell 36% to 792
units.
Finally
Still, the report supported Mr. Toll's preliminary
reports two weeks ago of higher year-over-year order volume.
The release gives a glimmer of hope for a market niche that
has seen its share of
suffering. If true, the allegations that home buying is
on its way back could mean better results for builders like
the ones mentioned below.
Company
Avg. Home Price (MRQ)
Profit Margin (TTM)
Toll BrothersÂ
$535,000
(12.2%)
D.R. Horton (NYSE:
DHI)
$211,000
(25.2%)
KB Home (NYSE:
KBH)
$216,000
(25.7%)
Pulte Homes (NYSE:
PHM)
$261,000
(29.6%) Continued... |