NEW YORK (Reuters) - Toll Brothers posted a quarterly profit on Thursday, helped mainly by cost cuts and an income tax benefit, and shares of the largest U.S. luxury builder rose more than 1 percent.
The company reported earnings of $50.5 million, or 30 cents per share, for the fourth quarter ended on October 31, compared with a year-earlier loss of $111.4 million, or 68 cents per share.
The number of net signed contracts fell 27 percent to 558 units as demand for new homes remained soft.
"2010 was another challenging year for our company and our industry as the persistent drag of high unemployment, reduced home equity, weak consumer confidence and frustration with the nation's economic and political climate outweighed the appeal of historic low interest rates and tremendous home affordability," Chief Executive Officer Douglas Yearley Jr. said.
A 13 percent drop in selling, general and administrative expenses and a $59.9 million tax benefit boosted the Horsham, Pennsylvania-based builder's quarterly numbers.
Revenue fell 17 percent to $402.6 million, but beat the analysts' average estimate of $393.8 million, according to Thomson Reuters I/B/E/S.
Write-downs on land that had lost value fell to $27 million from $85.5 million.
Tax refunds are bolstering a balance sheet that was already strong, Credit Suisse analyst Dan Oppenheim wrote in a note to clients.
"Toll's strong balance sheet should enable it to continue pursuing attractive opportunities on both land and distressed investments," Oppenheim said.
Toll shares, which lost 15 percent of their value in the last six months, were up 1.5 percent at $18.74 in premarket trading.
(Reporting by Helen Chernikoff; Editing by Maureen Bavdek and Lisa Von Ahn)