If a CEO knowingly lies to the market, he should pay the price. We'll find out one day soon I believe that the SEC might have a bit of an issue with Mr. Toll's rosy outlooks as Rome burned.
Huge Writedowns Hit Toll
Toll Brothers said first-quarter revenue dropped 19% from a year ago, missing the Wall Street estimate.
The Horsham, Pa., homebuilder said revenue dropped to $1.09 billion from $1.34 billion a year ago, missing the $1.17 billion Thomson Financial analyst consensus estimate. Toll said its quarter-end backlog plunged 30% from a year ago to $4.15 billion.
``It appears that the pace of cancellations is starting to abate," said CEO Robert Toll. "First quarter FY 2007 cancellations totaled 436 versus 585 in fourth quarter FY 2006 and this quarter's cancellation rate of 29.8% was lower than the 36.9% cancellation rate last quarter. However, we are still well above the Company's historical average of about 7%."
But Toll said it expects first-quarter writedowns could total $60 million to $160 million or more, as markets such as Detroit, Minneapolis, Chicago, Reno, Nev., and parts of Florida "may not yet have stabilized."
Toll said full-year writedowns would "significantly exceed the estimates in the guidance we provided in December 2006."
February 08, 2007
Oh, imagine that! Pump-and-dump 'we've hit bottom' Bob Toll knowingly lied to the market in December. Will he pay one day?
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33 comments:
uh oh.
Minneapolis and Chicago haven't 'stabilized yet'...
but those aren't on the coasts?!?
problem must be more widespread, huh?
Wasn't December just a few days ago? What changed so much in the past few days that Toll had to own up today?
Maybe he had to sell more shares?
If Toll's smart he'll buy a yacht and said offshore until the statute of limitations expire...
He can hire Mark McGwire to testify at the hearings for him!
PHENOMENAL article at Bloomberg.com about the land bust in Florida and elsewhere. First land, then condos, the homes. Adios housing market!!
Toll, Centex, Lennar Join `Moron' Speculators in Land Grab Bust
By Bob Ivry
Feb. 7 (Bloomberg) -- Brian Tuttle owns so much land that he paid $3.6 million to get rid of 125 acres ready for development in the middle of Florida's Palm Beach County.
``In 2005, I was a brain surgeon, and in 2006, I was a moron,'' said Tuttle, who walked away from his deposit on the land rather than lose even more money buying it and building homes on it. ``The only good news is that I'm not alone.''
The worst housing slump in 16 years made a lot of smart money vanish. D.R. Horton Inc., Pulte Homes Inc., Lennar Corp., Centex Corp. and Toll Brothers Inc., the five biggest U.S. homebuilders, said plummeting land prices cost them a combined $1.47 billion in the fourth quarter.
"Toll said its quarter-end backlog plunged 30% from a year ago to $4.15 billion."
What is backlog?
What does it mean?
Oh my God! A CEO lied about his companies financials. If you're shocked by that I have some more interesting observations for you. The sky is blue, water is wet......
Of course he will get away with it. If anything, he will resign his position and retire with half a billion dollars in cash and backdated stock options. I believe that is the ongoing pattern.
JAFO
It was already priced into the market!
So this is what "tap-dancing on the bottom" looks like, Bob?
I would be really interested to see how much deposit money people walked away from with all of those cancellations. Who is cancelling now? Are cancellations down because fewer people are signing up for an overpriced, poorly built house? I looked at a TOL subdivision last month. They wanted 1.2 million for the 'cheapest' model. Does that mean that people are walking away from $120,000 to keep from buying a million-dollar millstone around their necks?
I think the stock holders should organise a malitia and lynch him.
Backlog means orders for homes that aren't filled yet.
They have a bunch of homes on "order" and have to fill them.
As they "fill" them, they sometimes cancel.
Less homes have been ordered....which means more overhead per house, compressing margins. Plus alot of unemployed workers, probably subcontractors though...so not much impact on TOL.
But less houses and lower prices means much less profit per house...even with lumber and copper prices down a bit.
Plus they have to write off land which is on their books at above current market value. Current market value is a vague concept of course. If land isn't trading, what't the "market value"? Don't know how they figure that.
Plus cancelled houses leave TOL with an unsold house which is then sold on "spec" to anyone who wants it. But TOL keeps the deposit for teh cancellation (most likely, I guess)...don't know how much that is.
February 8, 2007 will be a day that will "live in infamy." HSBC Melts down, DowJones/Marketwatch has headlines about mortgage write-downs (market tanking), Toll writes down, and Jessie Jackson is now onboard with "preditory lending" hearings. . .let the crash begin!!
The point is, this housing situation is obviously very dire. (Big surprise to us "bitter renters" and fellow HPers)
And this will only accelerate. Many have said 2007 will be the year of reckoning. But my opinion is that it will be YEARS before this has all settled.
The new fashion look of housing related stocks. Coming to you this Spring!
http://tinyurl.com/327c3d
Haven't stabilzed yet.
The BIG one, California, hasn't even started yet. After everyone's worst nightmare happens, Boston, Miami, Chicago all plummet 50% or more in house value, the real destructor will arrive to completely sterilize.
I completely approve of the home builders building houses.
It's a social imperative to take advantage of stupid people, and this housing bubble is the mother of all ponzis.
As long as I can buy a house(s) on the cheap when it's over, I give my stamp of approval to any stupidity fleecer anyone wants to think up.
Niiiiice.
I think a lot of these mortgage company closings are management taking the money now, getting the hell out of Dodge before the lawsuits start flying.
If I were a mortgage lending executive I'd get lost in Europe and be unservable for a few years because at this point, the rest of your life is going to be courtooms and depositions.
I suppose that's a small price to pay to become a billionaire.
I don't think we've hit bottom:
http://www.financialsense.com/
Market/wrapup.htm
Housing still on down slope
Economists say no recovery until midyear; prices face record fall
By Steve Kerch, MarketWatch
Last Update: 3:35 PM ET Feb 7, 2007
ORLANDO, Fla. (MarketWatch) -- The U.S. housing market has not reached bottom and will likely not begin to recover until the middle of this year, three housing economists said Wednesday.
The weakness will extend to existing-home and new-home sales and housing starts as well as to home prices, which are likely to show their first full-year decline nationally since records have been kept, the economists told home builders at their annual convention here.
"I don't think we've seen the bottom," said David Berson, chief economist for Fannie Mae. "We're going to see a much bigger drop in investor demand this year. But by the second half of the year the market will stabilize, if investors pull out quickly."
Berson said he expects the home-price index calculated by the Office of Federal Housing Enterprise Oversight will show a nationwide decline in values for 2007, the first time that will have happened since the data began being collected in 1975. Unlike other measures, the OFHEO data measure the price changes on the same homes over time, meaning the index is less likely to be skewed by the types and locations of sales.
"It won't be a big decline, maybe 1%. And the declines will be far more centered in areas that have had the most investor activity," he said. "Real home-price gains, adjusted for inflation, will be negative this year, next year and possibly the year after that."
The biggest problem the housing market faces is "a seriously large inventory situation," said David Seiders, chief economist for the National Association of Home Builders, which is hosting the International Builders Show here this week. Seiders said the housing boom in 2004 and 2005 produced at least 400,000 more housing units than demand could support, and builders are having to push hard to move those homes off the market.
Seiders said, though, that he believes home sales did hit bottom in the fourth quarter and that housing will make a "gradual recovery" over the next two years. He said housing could actually begin to make a positive contribution to economic growth again starting in the second half of this year.
"One of the good things is that the U.S. economy has been able to handle the dramatic correction in housing," he said. "GDP growth, unemployment, the overall inflation situation and interest rates" have all been positive despite housing's woes, he said.
Seiders said he is forecasting housing starts to decline 14% in 2007 to 1.56 million units. Single-family starts will drop 15%, to 1.26 million. Those numbers would compare with a peak of 2.1 million units started in 2005 and represent a return to 2002 levels, he said.
"There is still a little room for sales and starts to weaken," said Frank Nothaft, chief economist for Freddie Mac. "We should hit the trough in the first half of the year. But we're a few years away from the robust levels of activity we saw in 2005."
Sales of existing homes are off about 13% from their peak in the summer of 2005, Nothaft said, but in some markets sales have tumbled 30% or more while in others sales remain robust. Weak markets include California, Florida and New England; in much of the South, with the exception of Florida, sales have remained steady or improved, he said.
Builder discounts build
To cope with the inventory overhang, home builders have been offering incentives to buyers. In its most recent surveys of its membership, the NAHB found that 50% of builders said they cut prices in the fourth quarter and close to 80% said they had either discounted homes or offered some other type of incentive to buyers, including paying loan closing costs, helping with financing charges or buying down mortgage rates for a set number of years, Seiders said.
"They know they have got to get those inventories down," Seiders said.
The biggest publicly traded home-building companies have seen results from their discounting efforts, Seiders said the NAHB surveys show. Big builder sales stabilized in the fourth quarter, Seiders said, as order cancellations -- which are not reported in government figures tracking the new-home market -- appear to have eased.
The flip side, however, is that home-building companies have watched their profit margins erode. "Margins have been taking it on the chin," he said.
Steve Kerch is the real estate editor of MarketWatch in Chicago
What you can't see in the picture is the one is stealing the others wallet!
Anon 1:36:29 PM should have posted the link:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aA90FVv3DDrY&refer=home
Here's a tinyurl for the previous:
http://tinyurl.com/yorcx8
This is a nice graph of Toll's plunging sales and backlogs
Toll Brother's Quarterly Sales
"It won't be a big decline, maybe 1%. And the declines will be far more centered in areas that have had the most investor activity," he said. "Real home-price gains, adjusted for inflation, will be negative this year, next year and possibly the year after that."
Oh god I love it. Anyone who listens to this drivel will just drive up the stock prices, make it all the sweeter for us shorts when the great cleansing finally arrives.
That Bloomberg article has a paragraph or two about and old lady who bought some land for 80,000 and is holding out for a 595,000 selling price.
This is the exact kind of greed that is hollowing out the real estate bubble, letting it appear to be stable but in reality increasing the severity of the inevitable bust. When it dawns on her that the price will plummet to 80,000 or less she'll try to unload it for anything she can get. She and everyone else acting in the same manner. That's when the entertainment begins as the real estate longs all crowd in to sell their rapidly crashing, minute by minute, holdings.
What's doubly sad (and glorious at the same time) is that they'll be getting vastly inflated dollars for their trouble and their real buying power will be less than when they initially bought the asset.
Niiiiice.
WEEEEEEE!!!! TODAY'S BEEN FUN!!!!
MLS#: 185332
Waimea Hawaii...Big Island
This property was listed for 295$k and sat on the market for a very long time..no buyers...now they've relisted it for 349k$!!! Email the Broker and let him know what you think!!!
gregorydoran@aol.com
Idiots!!!
CNBC is too busy talking about where billionaires buy their suits and ties, or talking about how hedge fund guy has to wait 9weeks for his new Ferrari.
I don't even know how they are on the air. If you watched them 10yrs ago, they actually talked about business and companies.
As far as buying a house, unless, RonPaul, Michael Savage, or Tom Tancredo become next president, I'm not sure if I'll ever want to own in USA again. The country is looking more like the Titanic every day.
Bush and his 2.9 trillion budget... has he lost his fcking mind?????? WTF kind of drugs is he on???
How about we pay off 1trillion i n natinal debt every year for next 9yrs.
how about we cut fed budget to 800billion.
cut all programs. cut it all.
non of it does sh;t anyway. just look at katrina. all a waste of money.
What's going to happen is we are going to try to inflate our way out of it until it all implodes in one huge paroxysmical financial frenzy.
Taxes won't be raised. Programs won't be cut. Government will borrow money until no one buys the Treasury bonds anymore, even at 20% interest because they know whatever interest they gain won't offset actual falling value. At that point the gubmint will literally print money without any sort of book keeping and the dollar will become virtually worthless crashing the entire world economic system.
Granted that's a worst case scenario but I think it's the most likely since no politician can solve this problem without getting kicked out of office.
When we fail to take care of business, nature will step in and wipe us out. No productivity = No high standard of living. We can only go so long making the rest of the world take our rapidly debasing dollars for their goods and services.
Any politician who talks of raising taxes (capitalists hate that) or cutting programs (communists hate that) will get booted out of office so the expedient of "printing up money" will be taken just for the political survival of those making the decisions.
Too bad you didn't vote for Ross Perot like I did. He would have fixed this crap. Instead you all voted for the Professional Liars. The politicians.
I think a lot of these mortgage company closings are management taking the money now, getting the hell out of Dodge before the lawsuits start flying.
+++++++++++
Absolutely. And I think these management types should have to forfeit EVERYTHING they steal out of their failing companies.
Put your left foot in and take your left foot out and you do the hokey pokey and you turn yourself about; the housing market is a dancin' on the bottom' that is what tol told us all before, and that's what its all about!!! ROTFLMFAO...rut row scoobie...
You think Ayn Randite Ron Paul will actually do anything to change the hypercapitalist outsourcing?
He's honest, but deluded.
Tancredo and Savage are low-IQ mouth breathers who want to stoke the bigotry.
The ruling CEO class just lurves those guys as the exploited rabble gets all uppity and racist about another segment of the exploited rabble.
Hint, your standard of living isn't going down the tubes because of Mexicans. And it aint the Joooz either.
Two groups: you if you are a F@cked REIC-suckered borrower, but most especially the corporatist hyper-rich Talibanite pseudocapitalists who are in cahoots with the Leninist-Capitalists tycoons in China to get really rich off your middle class carcass.
These perps just love it when the stupid AM-dial Mussolinis distract the masses from the reality.
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