Toll Brothers Withdraws Guidance; Quarterly Sales Down Sharply
Home builder Toll Brothers said its preliminary second-quarter sales fell from the same quarter last year, due to continued weakness in the U.S. housing sector, and the company also said it will not meet its previous sales and earnings guidance.
America’s leading builder of luxury homes said net home building revenue dropped 19% from the year-ago quarter, to $1.17 billion, according to unaudited results. And the value of the company's backlog of houses it has been contracted to build fell by 32% to about $4.15 billion.
Analysts surveyed by Thomson Financial predicted quarterly revenue of $1.1 billion.
"Twenty months into this housing downturn, we continue to face difficult conditions in most of our markets,” Chairman and CEO Robert I. Toll said in a statement.
And the company said it no longer expects to meet its most recent annual guidance. In February, Toll Brothers said it predicted full-year revenue of $4.2 billion to $4.96 billion and net income of $1.46 to $1.85 a share.
For the second quarter, Toll Brothers said it still expect to make a profit, even if writedowns are at the upper end of its predicted range, but that would be well below the 32 cents a share analysts are currently expecting.
The company also said that the subprime mortgage problems are even effecting the high-end home builders.
"We believe that fewer than 2% of our buyers use subprime loans," Robert Toll said. However, the impact of stricter lending standards arising from problems in the sub-prime market is negatively affecting affordability at lower price points."