Where's the buffoon Tushite who predicted good times are ahead for homebuilders on 2006?
Toll Brothers slashes sales outlook again
Tuesday February 7, 10:19 am ET
By Ilaina Jonas
NEW YORK (Reuters) - Luxury home builder Toll Brothers Inc. (NYSE:TOL - News) on Tuesday slashed its forecast for home sales for the second time in three months, driving its shares down as much as 4 percent, as first-quarter new orders fell 29 percent on slumping demand.
Toll is widely seen as a bellwether for the U.S. housing market. Its deteriorating forecasts may indicate that the slowing U.S. housing market may be deteriorating faster than previously thought, Raymond James and Associates analyst Rick Murray said.
"This would seem to indicate that those trends have not reversed course, and perhaps have even accelerated to the downside," Murray said.
Toll also helped drive down the U.S. home building sector, as reflected by the Dow Jones U.S. Home Construction Index (^DJUSHB - News), a wide barometer of home building stock activity, which was down 2.3 percent.
Toll now said it expects to close on sales of 9,200 and 9,900 homes in the fiscal year, ending on October 31, down from a previously lowered view of 9,500 and 10,200 homes. It attributed its revision to slowing demand and delays obtaining inspections, certificates of occupancy and utility hookups.
New orders during the quarter fell to 1,572, from 2,209, while the value of the contracts declined 21 percent, to $1.16 billion.
First-quarter revenue, which accounts for homes built and sold and typically reflects orders taken about a year earlier, rose 35 percent from a year-earlier, to $1.33 billion. Analysts on average had forecast total revenue of $1.35 billion, according to Reuters Estimates.
The company ended the quarter with a backlog of 8,635 homes contracted and awaiting construction at a value of $5.95 billion, up 22 percent.
"Demand at our communities, which began to soften in early September, now appears to be improving, although demand pressure from speculators has certainly passed," Chief Executive Robert Toll said in a statement.
Toll Brothers rattled the market in November when it first cut its forecast. Since it first slashed its forecast in November, its shares, which were down 75 cents, to $30.49 in early trading on the New York Stock Exchange, are off 24 percent. In contrast, the Dow Jones U.S. Home Construction fell 4.7 percent, its lowest level in about three months.
(Additional reporting by Michele Gershberg) |
