Toll Brothers says spring home sales weak

NEW YORK (Reuters) - Toll Brothers Inc (TOL.N: Quote, Profile, Research, Stock Buzz), the largest U.S. luxury home builder, said on Tuesday the spring selling season was weak and it expects to report a 30 percent drop in quarterly home-building revenue, sending its shares down 2 percent.

"(These) results brought further confirmation that this year's spring selling season has again been a letdown," Deutsche Bank analyst Nishu Sood said in a note to clients, citing the company's 44-percent decline in orders from a year ago.

Preliminary results show home-building revenue of $817.9 million for the fiscal second quarter that ended April 30, down from $1.17 billion a year earlier.

Analysts had expected sales of $762.0 million, according to Reuters Estimates.

"The just-completed spring selling season was quite weak in most markets as buyers remained on the sidelines," Chief Executive Robert Toll said in a statement. "We believe there is significant pent-up demand which is growing."

The U.S. housing market is in its worst downturn in decades, with home prices falling and mortgage defaults climbing.

To navigate the downturn, U.S. home builders have shifted their focus to survival, turning excess land and inventory accumulated during the boom times of 2002 to 2006 into cash.

Toll Brothers ended the second quarter with $1.23 billion in cash and $1.27 billion available under its bank credit facility.

It said it signed contracts for 929 homes, net of cancellations, during the quarter, down 44 percent from a year earlier. That translated into a 58 percent decline to $496.4 million.