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Local paper reported last weekend that they have over 5,000 permits on the books in our area to build in the next 3-5 years. They are in our area bigtime. Here is just off the wires...
NEW YORK, Aug 22 (Reuters) - Luxury home builder Toll
Brothers Inc. TOL on Tuesday said the slowdown in the U.S.
housing market pushed its quarterly profit down 19 percent, but
the results beat Wall Street forecasts and the company issued a
better-than-expected outlook.
Toll gave a revenue forecast for its upcoming fiscal year
that analysts said may be too optimistic, but its stock rose
nearly 4 percent in midday trading.
"People are saying, 'If the outlook is not so bad, and I
was short as a stock, I'd better go cover it,'" said Alex
Barron, JMP Securities senior housing analyst. Since Toll
announced on Aug. 9 that its quarterly orders were down,
investors have driven the shares down nearly 7 percent.
Shares in the home-building sector are typically very
volatile. The Dow Jones U.S. Home Construction Index DJUSHB
was up 1 percent.
Robert Toll, chairman and chief executive, attributed some
of the softness in demand to speculators who snapped up homes
as investments in 2004 and 2005 and now are unloading them. He
also cited home builders who constructed homes without first
having a buyer.
"Builders that built speculative homes are trying to move
them by offering large incentives and discounts, and some
anxious buyers are canceling contracts for homes already being
built," Toll said in a statement.
The softer market, about a year old, was reflected in
Toll's results, which showed earnings for the fiscal third
quarter ended July 31 fell to $174.6 million or $1.07 per
share, from $215.5 million, or $1.27 a share, a year earlier.
Wall Street analysts on average had forecast $1.04 a share,
according to Reuters Estimates.
The company said write-downs, predominantly from options
for land that it decided not to exercise, cost it about 9 cents
a share in the quarter.
Revenue dipped 1.3 percent to $1.53 billion. Analysts were
expecting $1.59 billion. Third-quarter revenue and earnings
reflect orders taken at least a year earlier.
For fiscal 2007, the Horsham, Pennsylvania, home builder
said it expects to sell 7,000 to 8,000 homes at an average
price of $635,000 to $645,000 each.
The projected sales and price translate into revenue of
$4.9 billion to $5.7 billion, Banc of America Equity Research
analyst Daniel Oppenheim wrote in a research note. Analysts'
average forecast was $5.10 billion.
"I think the company's being too optimistic," said JMP's
Barron, who expects Toll to generate revenue of $4.3 billion in
fiscal 2007.
Majestic Research analyst John Tomlinson, who also
considers the company's 2007 projection too optimistic, said,
"It's all about orders."
The company cut its earnings forecast for the current
fiscal year, ending in October, to a range of $4.41 to $4.63
per share, down from a previously lowered forecast of $4.69 to
$5.16. Analysts' average forecast is $4.40.
For the fiscal fourth quarter, Toll expects net income of
$1.33 to $1.53 per share.
Earlier this month, Toll reported that new orders in the
third quarter fell 47 percent to 1,443, while the value of
those contracts sank 45 percent to $1.05 billion.
On Aug. 9, it said its cancellation rate in the quarter was
about 18 percent, and cancellations were highest in last year's
hottest markets -- Orlando, Florida; Las Vegas, Nevada;
Phoenix, Arizona; and Palm Springs and Northern California.
Toll shares were up $1.05 to $25.82 on the New York Stock
Exchange. Since reaching a high in July 2005, the shares have
falen 56 percent, while the Dow Jones U.S. Home Construction
Index DJUSHB, which measures home builder performance, is
off 45 percent.
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