Toll Brothers Inc. said Wednesday that it posted a profit in its fiscal third quarter, as the luxury homebuilder snagged important tax benefits and posted fewer write-downs.
The company earned $27.3 million, or 16 cents per share, for the quarter that ended in late July. That compares with a loss of $472.3 million, or $2.93 a share, last year.
Excluding one-time write-downs, the company said its pretax adjusted income more than tripled to $13.3 million.
Revenue slipped to $454.2 million from $461.4 million the year before.
Analysts polled by Thomson Reuters expected the homebuilder to lose 14 cents a share on revenue of about $396.4 million.
Toll Brothers said its signed contracts fell 16 percent in the quarter to 701 units. The value of those units also fell 11 percent to $400.1 million dollars. The company said it delivered 803 units during the quarter, a slight increase.
Toll Brothers and other homebuilders enjoyed a bump in sales this spring as affordable prices, low mortgage rates and two federal tax credits lured homebuyers into the market.
The tax credit helped persuade first-time homebuyers in particular to take the plunge into homeownership, making it easier for established homeowners to sell their home and trade up to the kind of properties sold by Toll Brothers.
In the quarter ended in April, the builder's new home contracts jumped 41 percent.
But the tax credits expired at the end of April. Since then, the number of people looking to buy has dropped, even with the availability of the lowest mortgage rates in decades.
Sales of new U.S. homes jumped in June, but it was the second-weakest month on record. The weakening economic recovery, 9.5 percent unemployment, slow job growth and tight credit continue to keep many people from buying homes.
The tax credits pulled home sales that normally might have occurred this summer into the spring. Many experts now anticipate home sales won't likely recover until the job market improves.
It was a sentiment echoed Wednesday but executives at the homebuilder.
"Recent economic and political news continues to dampen our customers' confidence," Executive Chairman Robert I. Toll said in a statement. "We believe the combination of potential buyers postponing their purchasing decisions, a lack of new home production over the past several years, and a significant reduction in our competition in the luxury home niche could result in pent-up demand coupled with limited supply once a recovery takes hold."
Based in Horsham, Pa., Toll Brothers has operations in 20 states and is the nation's largest builder of luxury homes.
Its shares closed Tuesday at $16.19.
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