HORSHAM, Pa. - Toll Brothers Inc. said Wednesday that revenues are expected to slide 22 percent during the first quarter, and the luxury-home builder is not "seeing much light at the end of the tunnel."
Home contracts sank 38 percent, to 904 homes, and signed contracts fell 46 percent, to $573 million, compared with $1.07 billion during the first quarter last year, the homebuilder said in a preliminary report.
The average price per home fell more than 12 percent, to $634,000.
Toll Brothers said the price decline resulted from its focus on multifamily buildings, which fetch lower prices than single family homes.
"The housing market remains very weak in most areas. Based on current traffic and deposits, we are not yet seeing much light at the end of the tunnel," said Robert Toll, chairman and chief executive officer.
It would be the seventh consecutive decline in sales for the homebuilder, which, along with rivals, is struggling with turmoil in the mortgage market.
U.S. home prices plunged by a record 8.4 percent in November, marking two years of slowing returns.
"We expect to continue to face challenging times ahead," said Joel Rassman, chief financial officer. "We are still in the midst of finalizing our first-quarter impairment analysis; however, we currently estimate that pretax write-downs in FY 2008's first quarter will be between $150 million and $300 million."
Complete first-quarter results are expected on Feb. 27.
Shares fell more than 2 percent, or 45 cents, to $21.42 at the open of trade Wednesday.
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