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UPDATE 2-Toll Brothers home orders fall as winter keeps buyers away

* First-quarter orders fall 6 pct to 916 homes

* Cuts top end of 2014 delivery forecast to 5,850

* Says housing demand leveling out from year earlier

* Shares fall as much as 2.2 pct in early trading

Feb 25 (Reuters) - Toll Brothers Inc, the largest U.S. luxury homebuilder, reported a fall in quarterly orders for the first time in three years as a severe winter deterred buyers.

The company also cut the top-end of its 2014 estimate for finished homes to 5,850 from 6,100.

Toll Brothers' shares fell as much as 2.2 percent in early trading.

"The freezing, snowy weather of the past two months has impacted our business in the Northeast, mid-Atlantic and Midwest markets, where about 50 percent of our selling communities are located," Chief Executive Douglas Yearley said in a statement on Tuesday.

Toll Brothers, the only publicly listed luxury homebuilder until smaller peer WCI Communities Inc went public in July, had so far outperformed other homebuilders such as D.R. Horton Inc and PulteGroup Inc as its affluent customers were less affected by rising mortgage rates.

The company's large land inventory has also allowed it to ramp up the pace at which it builds, while D.R. Horton and PulteGroup have had to depend more on raising selling prices to drive growth.

However, the recent cold weather kept potential buyers at home and made it more difficult to break ground on new homes. U.S. housing starts recorded their biggest drop in almost three years in January.

Toll Brothers said on Tuesday orders dropped 6 percent to 916 homes in the quarter ended Jan. 31, seasonally the slowest selling period for U.S. homebuilders.

Analyst Wilkes Graham of Compass Point said he had expected an 18 percent growth in orders.

PulteGroup reported an 18 percent fall in orders booked during its quarter ended Dec. 31 while D.R. Horton said orders rose 4 percent.

LEVELING DEMAND

While the U.S. housing market recovery remains on track, homebuilders are having to adjust to slowing sales growth after reaping benefits of the initial surge in demand.

Toll Brothers said demand had leveled more recently against some very strong comparisons from a year earlier.

However, the company's strong land inventory and its expanded presence in California make it better positioned than some other homebuilders to weather the slowdown.

Toll Brothers acquired the home building business of privately owned Shapell Industries Inc in November, giving it access to about 5,200 lots in California, the state at the forefront of the housing market recovery.

Toll Brothers said its selling communities rose 5.8 percent to 238 in the first quarter.

The company said homes finished rose 24 percent to 928. Analyst Graham said he expected Toll to finish 1,074 homes in the quarter.

Revenue soared to $643.7 million from $424.6 million a year earlier. Net income jumped to $45.6 million, or 25 cents per share, from $4.4 million, or 3 cents per share.

Toll Brothers' shares were down 1.8 percent at $37.67 on the New York Stock Exchange on Tuesday. They had gained about 16 percent in the past 12 months to Monday close, outperforming a 13 percent rise in the Dow Jones U.S. Homebuilders index .

WCI Communities' shares were down 1.14 percent at $18.97.

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WCIC
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DHI
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PHM
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