Luxury homebuilder Toll Brothers Inc. said Thursday its first-quarter profit dropped 67 percent due to hefty writedowns and other costs, and CEO Robert Toll said there are still too many soft markets.
Quarterly earnings declined to $54.3 million, or 33 cents per share, from $163.9 million, or 98 cents per share, during the same period a year ago.
The latest quarter includes a goodwill impairment charge of $9 million related to Toll’s 1999 acquisition of the Silverman Cos. in Detroit. Results also were hurt by $96.9 million in costs to write down the value of land or housing stock the company no longer believes it can sell at a profit, versus writedowns of just $1.1 million in the prior-year period.
Analysts polled by Thomson Financial were looking for net income of 29 cents per share.
Quarterly revenue slipped 19 percent to $1.09 billion versus $1.34 billion in the previous year, meeting Wall Street’s expectations.
First-quarter net signed contracts slid 34 percent to $748.7 million.
“There are too many soft markets at this stage of the selling season to call a general upturn in the new home market. Demand varies greatly from week to week in individual markets,” Chairman and Chief Executive Robert I. Toll said in a statement.
The company’s first-quarter cancellations totaled 436 units, down from 585 units in the 2006 fourth quarter. Toll said its cancellation rate of 29.8 percent was lower than the fourth-quarter’s 36.9 percent rate but still well above the company’s historical average of about 7 percent.