Toll Brothers Posts Loss

Updated from 9:06 a.m. EST

Toll Brothers(TOL Quote - Cramer on TOL - Stock Picks) reported its first quarterly loss in more than two decades, but it was less severe than analysts expected, after the luxury homebuilder avoided writing down some of its land inventories.

Toll lost $81.8 million, or 52 cents per share, in the fourth quarter, compared with profit of $173.8 million, or $1.07 per share a year earlier. Analysts expected a loss of 77 cents per share, according to Thomson Financial.

Revenues fell 35% to $1.17 billion in the quarter. The loss included $315 million in pretax writedown charges.

Some analysts expected even higher writedowns. Shares were climbing 4.6% to $21.67 in Thursday morning trading.

"We believe Toll will suffer larger impairments in the future by resisting lower prices as falling home prices mean selling a home in the future nets fewer proceeds than selling today," Bank of America analyst Daniel Oppenheim said in a research note.

Oppenheim expects $875 million in additional impairments based on Toll's large land supply and expected price declines.

"We sense continued hesitancy to cut prices from Toll's management given its hope for a sharp recovery," Oppenheim wrote.

In a statement, CEO Bob Toll said 2007 was likely the worst year ever for the company, but he pointed to signs of recovery on the horizon.

"It's not a matter of if, but a matter of when, this oversupply is absorbed. Then we shall return to better times," Toll said.

"I believe those who wanted to buy but didn't will kick themselves for their reticence, but the biggest hurdle for our clients right now is their concern about their ability to sell their old homes. An inability to obtain mortgages does not appear to be a problem for our buyers, but probably is a problem for our buyers' buyers."