The Horsham-based luxury homebuilder Toll Bros. Inc. said Tuesday that its fourth-quarter profit had declined almost 70 percent to $15 million, or 9 cents per share, compared with $50.5 million, or 30 cents per share, in the same period of 2010.
Toll attributed the year-over-year profit decline to write-downs on inventory and joint ventures, as well as charges related to retirement of debt.
A $59.9 million tax benefit in the year-ago quarter also had provided a big boost to the builder's income in that period when the pretax loss was $9.5 million.
Without the charges, fourth-quarter 2011 pretax income would have reached $33.9 million, up from $18.1 million a year earlier. Revenue increased to $427.8 million from $402.6 million.
Chief executive officer Douglas C. Yearly Jr. said Toll's "strong balance sheet gives us the financial flexibility to invest in the future," despite continued economic uncertainty here and abroad.
In Toll's fiscal 2011, the builder spent $281 million for land, buying about 3,400 lots and optioning 5,800. Nearly 60 percent of its 37,500 lots either owned or controlled is in the corridor running from Washington, D.C., to Boston, "which enjoys lower unemployment and greater affluence than many other regions," Yearly said.
The National Association of Home Builders reported Tuesday that Washington was on its list of improving metropolitan markets in December. The list of 41 improving markets encompasses 21 states and the District of Columbia.
The markets that have shown improvement are those in which "employment is gaining and distressed properties are not as numerous," said David Crowe, the association's chief economist.
Distressed properties continue to contribute to stagnation in the housing market. Real estate information provider CoreLogic of Santa Ana, Calif., reported Tuesday that home prices nationally had fallen 1.3 percent in October, after dropping 3.8 percent in September, and were 3.9 percent lower than October 2010.
Robert I. Toll, executive chairman of Toll Bros., said "a lack of confidence in the direction of the economy is perhaps the biggest impediment to releasing what we believe is significant pent-up demand."
Despite continued economic uncertainty nationally, Yearly said Toll had recently entered the Seattle market, and that the "urban New York market remains a bright light for us," with 2,430 of the 2,550 units in 13 buildings sold.
Toll chief financial officer Martin P. Connor said the builder was "encouraged by our improving margins and continued string of modest profitability."
Connor's current estimate for fiscal 2012 is that Toll will deliver 2,400 to 3,200 homes at an average price of $550,000 to $575,000.