Toll Brothers Inc. reports 21% drop in revenue

Luxury home builder Toll Brothers reported a 21% drop in revenue for Q3 2007, which was, nevertheless, better than analysts had expected. JP Morgan Securities had forecast a drop of 28%. Shares gained 6% on the news, the biggest increase in a year. Toll reported sales of $1.21 billion, a drop from $1.53 billion a year ago, but still better than the projected $1.09 billion. Toll did not make an earnings forecast for this year, which may mean that they are concerned about their financial stability.

Toll Brothers CEO Robert Toll said the worst markets were in Florida, Nevada and Southern California, but Philadelphia, Massachusetts and Washington are stabilizing. He also noted that ‘no one knows’ how long the slump in housing will last. The cancellation rate reached 24% in Q3, up from 19% in the previous quarter. The current housing slump is hurting all homebuilders, and Toll Brothers has not escaped unaffected, but they seem to be doing better than most for now.