Toll Brothers Revenue Drops

Toll Brothers (TOL Quote) said third quarter revenue dropped 21% from a year ago, as contracts signed and quarter end backlog both fell by about a third.

The Horsham, Pa., homebuilder said it believes the fourth-quarter sales pace could slow further, due to a credit crunch hitting the mortgage market.

Toll said third-quarter homebuilding revenue was $1.21 billion, down from $1.53 billion a year earlier but above the $1.08 billion Wall Street estimate.

The company said it expects to take between $125 million and $175 million in writeoffs in the latest quater, covering land and land options as well as the cost of housing developments. Toll declined to offer earnings guidance. Contracts dropped 31% and backlog 34% from a year ago, while the cancellation rate rose to 23%.

Toll said it has over $700 million in cash and more than $1.1 billion available under its bank credit facility; no major debt is due before 2011.