Toll Brothers Says Cancellations Rose Sharply
Toll Brothers said Tuesday cancellations rose and traffic fell to record lows as the financial crisis worsened in the latest quarter.
"Unfortunately, the preliminary signs of stability we had discussed in early September ... were upended by the past month's financial crisis," said Chairman and Chief Executive Robert Toll, said in a press release.
The luxury homebuilder said it expects fiscal fourth-quarter building revenue to fall 41% to $691 million. The estimate is higher than the $655 million projected by analysts surveyed by Thomson Reuters.
The company's backlog fell 54% in dollar terms, while net signed contracts dropped 27%.
Pretax write-downs on land and joint ventures for the latest quarter should range between $120 million and $220 million, the company said.
In addition, Toll reiterated his stance that the federal government needs to take a more active role in assisting the housing market by stopping the decline in home prices. To do that, he suggested Congress cut mortgage rates and fees and enact a buyer tax credit.
Toll also added he expects the shakeup in the homebuilding industry to eventually help his business by narrowing the field of competition.
"We believe this less crowded playing field, combined with attractive long-term demographics, will reward those well-capitalized builders who can persevere through the current challenging environment," Toll said.