Toll Trims Estimates Again

In a prepared statement, Toll Brothers CEO Robert Toll said the current housing slowdown first manifested last September and is "somewhat unique."

"It is the first downturn in the 40 years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors," he said.

"Instead, it seems to be the result of an oversupply of inventory and a decline in confidence: Speculative buyers who spurred demand in 2004 and 2005 are now sellers; builders that built speculative homes must now move their specs; and nervous buyers are canceling contracts for homes already under construction. The resulting excess supply has exacerbated the drop in consumer confidence, which first appeared last September, that was already a drag on new-home sales."

The company also said it saw an increase in its cancellation rates in a number of markets, including Orlando, Fla.; Northern California; Palm Springs, Calif.; Las Vegas; and Phoenix.

Also on Wednesday, fellow builder WCI Communities(WCI Quote), which mainly focuses on the Florida condo market, said its earnings fell 68% in the second quarter to $22.7 million, or 52 cents a share. The results were well short of Thomson First Call's average analyst estimate of 73 cents.

WCI also cut is full-year earnings guidance to $2.75 to $3.25 per share. Analysts currently expect earnings of $3.59 a share. WCI shares recently were down 54 cents, or 3.4%, to $15.37.