Luxury home builder Toll Brothers (NYSE: TOL) said Wednesday that home building revenue would be lower than expected and it would not reach its latest quarterly and annual guidance.
Second quarter signed contracts for the period which ended on April 30 were down 25 percent to about $1.17 billion.
The firm also said its second quarter home building revenue fell 19 percent, to about $1.17 billion, down from $1.44 billion in the same period a year ago.
Twenty months into this housing downturn, we continue to face difficult conditions in most of our markets, Chief Executive Robert Toll said in a statement.
Toll Brothers attributed the decrease to tighter lending standards due to problems in the subprime market, even though it believes only 2 percent of its clients use such loans.
The company expects pre-tax write downs between $90 million and $130 million in the quarter.
Toll Brothers had previously said that its full year home-building revenue would be in the range of $4.2 billion to $4.96 billion. Net income had been expected to be between $240 million to $305 million, or $1.46 to $1.85 per share.