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Bright and early this morning, Toll Brothers (NYSE: TOL) reported that its first-quarter loss narrowed thanks to fewer write-downs. The luxury homes giant lost 55 cents per share compared to 61 cents per share a year ago. The quarterly loss misses the Thomson Reuters estimate by 3 pennies. TOL's latest results included write-downs (pre-tax don't you know?) of $156.6 million, compared to $245.5 million last year. Taking the write-downs out of the equation, TOL's quarterly profit hit six cents per share. TOL's quarterly revenue dropped 51% to $409.3 million.Looking ahead, TOL stated that it won't provide fiscal 2009 guidance thanks to the current market climate. The homebuilder did state expectations that it will deliver somewhere between 2,000 and 3,000 homes in the current year at an average price between $600,000 and $625,000.
TOL said that it continues to "focus on maintaining a strong balance sheet and significant liquidity" in light of the current credit crisis. TOL implored the government to pass the $15,000-per-home tax credit, which some have called a "roundabout bailout," as it would lead to the government subsidizing its product.
Home prices continue to drop, thanks to a glut of inventory and a lack of buyers. According to TOL, there are a large amount of buyers "on the fence," and the company's 3.99% mortgage promotion led to an increase in traffic to its mortgage company's website. Nevertheless, there just isn't a large market for luxury homes.
Since this past September, shares of TOL have dropped steadily, finding resistance from their 10- and 20-week moving averages. That said, it does seem that the shares may have found a measure of support at the $14 level, keep an eye on this region as the week progresses - we could see the stock rebound from this level.
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