Luxury homebuilder Toll Brothers Inc. (TOL)
said Wednesday its fiscal first quarter revenue fell 51% from the year-ago
The Horsham, PA-based company said its first quarter
homebuilding revenue came in at $409.3 million, significantly down from revenue
of $842.3 million the company posted a year earlier. Analysts, on average, had
been expecting revenue of $442.6 million.
Toll Brothers said its signed contracts fell 66% from the
year-ago period, to $128.1 million.
The company's lackluster results are indicative of the
overall housing market collapse. Rising unemployment, a tightening credit
market, and an overall lack of buyers have all combined to in recent months to
create a glut of unsold homes and sharply rising foreclosure rates.
As for full-year fiscal 2009 estimates, the company only
said that it expects revenue numbers significantly lower than those of 2008. On
average, analysts are expecting a first quarter loss of 30 cents per share.
The Bottom Line
The stock has technical support at the $10 price area. If the shares do stage a
rebound, we see overhead resistance in the $22-26 price range. The company’s
cash position is strong but we are not sure where the demand for new business
will come in this current economic environment. We are watching the
homebuilding sector for signs of positives, but we continue to be disappointed.
We will be looking for solid signs that a turn may be coming, but for now, we
would consider the sidelines our “home”.
Toll Brothers (TOL) does not currently pay a dividend.
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