Toll Bros., the Horsham-based luxury-home builder which has increasingly expanded operations on the west coast, on Tuesday posted higher sales and profits for fiscal 2017 and its fiscal fourth quarter (the three months ended Oct. 31) compared to last year, writes Joseph N. DiStefano on philly.com
Shares in Toll were down more than 6 percent, to a little over $47, in mid-day trading. The stock had risen steadily this year from the low $30s last winter, on expectation of stronger sales. Shares of Hovnanian, Pulte and other homebuilders have also been down lately amid renewed fears that Republicans in Congress will trim the home purchase interest tax break that helps subsidize the industry.
The quarter marked “our highest annual contracts and revenues in over a decade” — since the late 2000s recession —and “demand has remained healthy” across Toll’s urban and suburban markets, chief executive Douglas C. Yearley Jr. told investors in a statement.
But growth and sales came in “a little slower than expected,” chief financial officer Marty Connor acknowledged. He blamed delays in three New York City high-rise projects, which he said will now come in during fiscal 2018, instead of last year. Toll Bros. also blamed defective joists from lumber supplier Weyerhauser, which delayed dozens of sales. The company said Weyerhauser is replacing the joists and covering losses.
In part, Yearley credited Toll’s growth to acquisition of builders in California and other Western states over the past six years, as well as land purchases that have proved ripe for construction.
Net income for the company’s fourth quarter totaled $192 million, or $1.17 per share (diluted), on sales of $2.03 billion. That’s up from $114 million and 67 cents a share in the same quarter last year, a 9 percent increase. Last year’s profits were reduced by a one-time warranty charge.
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