Toll Brothers in Red
On Land Write-Downs

Toll Brothers Inc. Thursday said it swung to a loss in its fiscal fourth quarter on more write-downs of land values amid the continuing housing downturn.

For the quarter ended Oct. 31, the luxury-home builder reported a net loss of $81.8 million, or 52 cents a share, compared with year-earlier net income of $173.8 million, or $1.07 a share.

The latest results included pretax write-downs of $314.9 million, or $1.22 a share. Toll said last month it expected to take write-downs between $250 million and $450 million because of declining land values. Year-ago results included $115 million, or 42 cents a share, in land-related write-downs.

Analysts, on average, expected Toll to post a loss of 77 cents a share for the quarter, according to a poll by Thomson Financial.

Revenue at the Huntington Valley, Pa., company dropped 35% to $1.17 billion from $1.81 billion.

As Toll reported last month, signed contracts fell 33% to 1,073 and cancellations dropped 29% to 417. Backlog as of Oct. 31 was $2.85 billion, down 36%. The cancellation rate rose to 38.9% from 36.7% a year ago.

Toll Brothers has resisted price cuts, which several home builders have used to try to reduce inventory. As a high-end builder, Toll suffers less from the subprime-lending fallout than others in the industry, but it isn't immune to the broader credit crunch.

Toll Brothers said it isn't providing forecasts for fiscal 2008 earnings, as market uncertainties make it difficult to provide an estimate. However, the company predicts fiscal 2008 revenue to be below that for fiscal 2007. In addition, Toll Brothers expects to deliver between 3,900 to 5,100 homes in fiscal 2008.

Toll's shares closed Wednesday up 35 cents, or 1.7%, at $20.72.

Email your comments to rjeditor@dowjones.com.