Toll Bros. Misses Some Targets
The reaction to the financials from home builder Toll Brothers shows that expectations have bubbled up too. "Unit deliveries were 13 homes under the low end of the range of the company's most recent forecast and below what analysts had expected, while the average home price was slightly above the high end of the range."
Yes, the Toll's love to raise prices, and buyers will pay these days. Obviously, Toll is betting that will continue. "The homebuilder posted a record fiscal second-quarter backlog of 8,561 homes. The company said it now controls about 68,000 lots, up from 58,000 a year ago."
4 Comments:
Backlogs are meaningless for a market at its turning point.
New home purchases have option-like properties. By the time the house is built, the buyer can choose to bail out if its value is not up to expectation. All they lose is a few thousand dollars in "good faith" deposit.
The West Coast was one area that Toll didn't do well. I love this comment from Dr. Pump-n-Dump:
"Toll said the decline on the West Coast, in particular California, was due to a lack of supplies rather than demand, and it believes it will increase its California community count in the coming year."
This guy will say just about anything to put a good spin on his business. On the other hand, a 60% YOY revenue jump from '04 IS pretty dammned impressive. Too bad it's all based on a giant credit bubble that is about to pop...
RE:conf call
lots of time was spent putting out the flames of speculator driving the mkts, also, some revealing stats on the % of arms and io loans...mucher higher than one would expect if we were to believe that toll's customer profile is the rich...sounds like the buyer is stretched & on hope that r/e is going up up.
r toll is classic snake oil con man
u can hear it in his voice...
Deb,
The builder is the only source of cancellations, to my knowledge. They usually let it out with the quarterly numbers.
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