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Toll Brothers, the big luxury home builder headquartered in Philadelphia, announced a surprising shrinking of its losses today. It reported losses of $88 million in this fiscal year’s first quarter versus $99 million in the same period last year. Excluding write downs, the company actually earned $9.6 million in the quarter. Sales were down 51% to $400 million but the company also enters the new year with debt as a percent of total capital at just 14%, it’s lowest level ever, the company said.
CEO Bruce Toll attributed the relatively good results to incentives the company has put in place for home buyers. “Our recent 3.99% mortgage promotion had a dramatic effect on our website activity; visitors to our mortgage company website, www.tbimortgage.com, grew from 84 a day to 1,617 a day.”
Still, Toll was not calling any kind of turnaround yet. “We believe weak buyer confidence still impedes the market,” he said. “We have not yet seen a pick-up in activity at our communities other than ordinary seasonal increases for this time of year.”
The stock rose 3% on the news to $14.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.