Toll Brothers said on Thursday that it expected to report a 36 percent drop in quarterly home-building revenue, reflecting the deepening decline in the U.S. housing market.
Based on preliminary results, Toll said home-building revenue for the fourth quarter ended on October 31 was about $1.17 billion.
Because of its fiscal calendar, Toll is the first major home builder to report quarterly results that include October's activity. Investors use it as an indicator of the performance of other home builders.
The company, the largest U.S. luxury home builder, signed 1,073 contracts -- a predictor of future business --during the fourth quarter, down from 1,595 a year earlier. The value of the contracts fell to $693.7 million from $1.12 billion.
Cancellations declined to 417 worth about $328.5 million from 585 worth $412.3 million, the company said.
Toll Brothers also said its backlog at October 31 was about $2.85 billion, down 36 percent.
We can't predict how long this down period will last, but the foundation of the housing market -- primarily solid demographics -- have remained strong, Chief Executive Robert Toll said in a statement.