Luxury builder swings to a loss

Toll Bros. Inc. said Thursday that it swung to a loss in its fiscal third quarter as weak demand for new homes forced the luxury builder to mark down the value of its land and unsold homes.

But Chief Executive Robert Toll is seeing signs the market is stabilizing: The company had the lowest contract cancellation rate in more than two years, and more buyers are putting down deposits, he said.

“We believe that there is pent-up demand,” Toll said in a statement but added that the housing market wouldn’t begin to recover until the trove of foreclosed homes on the market were sold.

“Unfortunately, we can’t predict when that will occur,” he said.

The Horsham, Pa.-based builder lost $29.3 million, or 18 cents a share, in the three months that ended July 31. That’s a reversal from a profit of $26.5 million, or 16 cents, a year earlier.

Toll absorbed $84.3 million in after-tax write-downs in the quarter. Excluding the charges, earnings were $55 million, or 35 cents a share, and in line with Wall Street estimates.

Quarterly revenue fell 34% to $797.7 million as revenue from completed contracts declined.

Toll shares rose 27 cents, or 1.1%, to $25.07 after the earnings news.