Toll Brothers Posts Loss For 1st Quarter

HORSHAM, Pa. (AP) — Toll Brothers Inc. posted a first-quarter loss Wednesday as the nation's biggest luxury homebuilder reported a slight decline in home deliveries and a higher cancellation rate.

But it also posted an increase in net signed contracts and backlog — which is a key barometer of future home deliveries..

CEO Douglas C. Yearley Jr. said in a statement that the company is starting to see a recovery in areas such as the Detroit and Phoenix suburbs and the east coast of Florida.

"Although historically, our first quarter is the most challenging time to gauge sentiment among home buyers, in general the market feels healthier than it did one year ago," he said.

Yearley also said that Toll Brothers is seeing continued strength in the Northeast corridor from Washington, D.C., to Boston, which represents 60 percent of its business.

Toll Brothers caters to the luxury sector, which has withstood the economic downturn better than others. Its target market includes high-income earners who typically make more than $100,000 a year, can afford to make a down payment of as much as 30 percent on a home, have great credit and have an unemployment rate about half that of everyone else.

Still, uncertainty over the economy, high unemployment and concerns that home prices have yet to hit bottom continue to keep many home buyers on the sidelines.

Its shares fell 95 cents, or 4 percent, to $22.75 in morning trading, a day after hitting a 52-week high of $24.22. Its shares are up 73 percent from their low of $13.16 set in early October.

Toll Brothers reported a net loss of $2.8 million, or 2 cents per share, for the three months ended Jan. 31. That compares with net income of $3.4 million, or 2 cents per share, a year earlier.