Toll Brothers Sees First Loss
Oh how the mighty have fallen…and keep falling. PhillyBurbs is reporting that Toll Brothers, the nation’s largest luxury home builder, has posted its first quarterly loss ever. Here’s the latest:
The $81.8 million loss was driven by $315 million in write-downs of property whose value had plummeted, the company said. A write-down is the downward adjustment in the accounting value of an asset.
“By many measures, fiscal 2007 was the most challenging of the 40 years that Toll Brothers has been in business,” said Robert Toll, CEO of the Horsham-based company. “1974 was perhaps rougher, but the difficult times only lasted one year.”
The loss translates to 52 cents a share. Without the write-downs, the company would have seen a profit of $118 million, or 72 cents a share. Still, the company beat analysts’ expectations of a 77-cent-per-share loss, and its shares rose 13 percent, or $2.70, to close at $23.42 on Thursday.
Yet another business taking huge writeoffs, it’s amazing just how fragile most real estate related companies are proving to be. Many home builders rely on profits to stay in business, and just one bad quarter can often mean bankruptcy.
Budgeting is important to avoid such a situation in one’s every day life. That’s why many use programs such as a mortgage payoff plan to budget their life’s finances, and ensure that even the bad quarters get weathered well.
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