Toll Brothers 2Q homebuilding revenue fell by half

Toll Brothers Inc. said today its homebuilding revenue dropped by 51 percent in its fiscal second quarter, but the luxury homebuilder sees signs the real estate market is recovering. The company said it sold 648 homes totaling $398.3 million in revenue in the period ended April 30. And while the number of homes sold fell 47 percent from the second quarter last year, it was more than double first-quarter sales. Robert Toll, chairman and chief executive officer, said in a statement there are "a few reasons for cautious optimism," noting that homebuyer deposits have exceeded comparable weekly figures from fiscal 2008 for seven of the past nine weeks. But there are also a few reasons the real estate recession, now in its third year, may not be ending. Chief Financial Officer Joel Rassman in the statement underlined the "significant uncertainty surrounding sales paces, cancellation rates, market direction, unemployment trends" that are preventing the company from forecasting future profits. Toll Brothers will release final quarterly results on June 3, and analysts surveyed by Thomson Reuters expect a loss of 33 cents a share on revenue of $386.7 million. The company estimated it will have to write down the value of its residential communities, land holdings and joint ventures by between $90 million and $160 million for the second quarter. For the first half of its fiscal year, building revenues totaled an estimated $807.3 million, also down about half from the first half of 2008. Toll sold 1,313 new homes, down 46 percent.