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Slipping Sales Due to Housing Slump

HORSHAM, PA-Both Toll Brothers Inc. and Orleans Homebuilders Inc. reported Q4 results, which show lower revenue due to cancellations and dropping sales.

By Alex Finkelstein | Updated on February 09, 2007

HORSHAM, PA-Toll Brothers Inc. and Orleans Homebuilders Inc. of Bensalem, Pa. are reporting lower revenue but remain upbeat despite cancellations and dribbling sales. In conference calls Thursday, Toll chairman and CEO Robert Toll said first-quarter revenue fell 19% to about $1.09 million compared to $1.34 million in the comparable 2006 period. Toll’s quarter ended Jan. 31.

“The pace of cancellations is starting to abate,” Toll said. First quarter cancellations totaled 436 (30%) compared to 585 (37%) in the last quarter of 2006. In a thriving economy, the company generally has a 7% cancellation rate.

Toll said his company’s backlog is down 30% to $4.15 billion. The number of signed contracts was down 34% to $749 million. “Home-buying activity (still) feels encouraging,” the CEO said. The company is considering writing down $60 million for the quarter but that number could be much higher, Toll said.

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