Horsham, PA, November 7, 2006--Home builder Toll Brothers Inc. said Tuesday that its fourth-quarter home building revenue dropped 10 percent as the housing market continues to soften, and warned it would see a hefty charge in the quarter.
The company also reduced its outlook for fiscal 2007 home deliveries, citing its decreased backlog and slower market conditions.
Home building revenue for the quarter sagged to $1.81 billion from $2.01 billion in the prior year.
Backlog slipped to $4.49 billion from $6.01 billion, while signed contracts for the quarter declined 55 percent to $710 million from $1.59 billion a year ago.
The company had higher-than-expected cancellations, with 585 contracts terminated during the quarter.
Full-year home building revenue climbed 6 percent to $6.12 billion from $5.76 billion. Signed contracts slid 38 percent to $4.46 billion from $7.15 billion.
Toll Brothers said it reduced its land position by about 6,500 lots. It expects writedowns on optioned and owned land in the fourth quarter between $50 million and $100 million, which would reduce fourth-quarter net income by 18 cents to 36 cents per share.
Toll Brothers now expects to deliver between 6,300 and 7,300 homes for fiscal 2007, down from its prior outlook of 7,000 to 8,000 deliveries.
For the first quarter, the home builder expects to deliver between 1,500 and 1,800 homes.
"We continue to look for signs that a recovery is imminent but can't yet say that one is in sight," Chairman and Chief Executive Robert I. Toll said in a statement.
