Toll's Homebuilding Revenue Slumps 51%

The luxury homebuilder said first-quarter revenue fell 51% as potential homebuyers remain concerned about financial instability.
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Luxury homebuilder

Toll Brothers

(TOL) - Get Report

said homebuilding revenue for the first quarter ended Jan. 31 was $409.3 million, a drop of 51% from a year earlier as financial instability keeps potential homebuyers out of the market.

Toll said Wednesday that backlog at Jan. 31 was about $1.04 billion, a decline of 56%, while net contracts signed were down 66% to $128.1 million.

Toll said it plans to release final earnings results on March 4.

The company had 157 cancellations totaling about $115 million in the first quarter. This compares with 257 cancellations, or $198 million, a year earlier, and 233 cancellations, or $183 million, in the fourth quarter.

Toll said it "continues to focus on maintaining liquidity as it positions itself for opportunities that it believes should arise from this downturn."

Toll ended the first quarter with about $1.53 billion of cash, down slightly from the fourth quarter, and $1.32 billion available under its 31-bank credit facility.

"While we have not yet finalized our impairment analysis, we estimate that pre-tax writedowns related to operating communities, land and land options, and joint ventures in FY 2009's first quarter will be between $100 million and $200 million," said Joel Rassman, chief financial officer. "Given the significant uncertainty surrounding sales paces, cancellation rates, market direction, unemployment trends and numerous other aspects of the overall economy, we are not prepared in this preliminary release to offer new, or comment on previous, guidance."