Toll Brothers supplied the latest bit of bad news for the housing sector this morning, saying its fourth-quarter home-building revenue slid 36% lower to $1.17 billion. On the plus side, this was above analysts' expectations of $1.13 billion. Though the company specializes in high-end and luxury properties therefore making it more immune to the subprime woes business has still suffered amid high commodity costs and a credit crunch.
Signed contracts were considerably lower as well, falling 33% in terms of units sold. Toll inked 1,073 contracts during the three-month reporting period; these were collectively worth $693.7 million, compared to 1,595 contracts signed a year ago for $1.12 billion.
Cancellations totaled 417 (worth $328.5 million), down from 585 (worth $412.3 million) last year. As of October 31, Toll's backlog stood at $2.85 billion, a 36% drop on a year-over-year basis.
The worst news is that investors can expect continued weakness. Last month, company head Robert Toll opined that the housing market has yet to bottom out, and observed that the subprime crisis won't be cured by the Fed's rate-cut gestures.
In afternoon activity, TOL shares have lost 2.6%. The ISE Homebuilders Index (RUF) is off 3.7%, hitting yet another new annual low.