Toll Rings Bells of Caution

Updated from 12:27 p.m. EST

Toll Brothers(TOL Quote) offered investors cautious comments about the state of the housing market, saying Thursday that it doesn't yet see an upturn and signaling that selling conditions have deteriorated somewhat in February.

The outlook came as the luxury-home builder reported a 67% drop in fiscal first-quarter profits and lowered its full-year outlook amid continued weak housing sales.

Shares of Toll recently were down 79 cents, or 2.4%, to $32.07.

In a statement, CEO Robert Toll said there are too many soft markets to call a general upturn in the new home market. "Demand varies greatly from week to week in individual markets," he said.

Bank of America analyst Daniel Oppenheim said he views Toll's comments as less positive than two weeks ago, when the builder reported its orders for the quarter and signaled an uptick in demand in January and early February.

"We think this [less-positive commentary] is a reflection of choppy market conditions and the soft traffic at the start of the spring season, consistent with what we have seen in early results of our February Survey of Real Estate Agents," Oppenheim wrote in a research note Thursday.

On the company's earnings conference call, Robert Toll addressed the fact that his comments in the release seemed to suggest that the market had gotten worse.