Toll shares rise as Q4 net contracts up 42 percent
SEATTLE (Reuters) - The slump in the housing market ended around March, and while there is improvement, it will be slow and fitful, U.S. luxury homebuilder Toll Brothers Inc's (TOL.N) Chief Executive Robert Toll said on Wednesday.
The housing market slump, "we now believe, ended approximately in March 2009," Toll said in a conference call, following its preliminary fourth quarter results a day earlier. "Basically, we think we're working our way out of it. It will come in fits and starts."
Toll Brothers said late Tuesday it expected fourth-quarter revenue to drop 30 percent, but that was still higher than Wall Street's expectations, and its shares rose nearly 6 percent after markets closed.
The largest U.S. builder of luxury homes and apartments also said fourth-quarter net contracts rose 42 percent to 765 units, or 62 percent to $430.8 million -- yet another positive sign for the housing market, which has been showing signs of improvement.
Other homebuilders also rose after Toll Brothers' results. Lennar Corp (LEN.N) rose 6.4 percent, Pulte Homes Inc (PHM.N) was up 9 percent, KB Home (KBH.N) rose 6.3 percent and DR Horton Inc (DHI.N) was up 6 percent.
The summer months in the Unites States saw the housing market, including both resale and new homes, get a boost from a $8,000 federal tax credit for first-time home buyers.
The extension of home buyer tax credit and broader eligibility should help attract hesitant consumers, Toll Brothers said.
But potential home buyers were still worried about unemployment and the economy, a likely reason for volatile trends since Labor Day, Toll said in the call.
The company's shares rose $3.02 or 16.4 percent, to end the day's trade on the New York Stock Exchange at $21.42.
(Reporting by Aarthi Sivaraman, editing by Leslie Gevirtz)
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