The luxury-home builder's earnings fell to $36.7 million, or 22 cents a share, from $174.9 million, or $1.06 a share, a year earlier. Analysts polled by Thomson Financial expected, on average, earnings of 25 cents a share.
The company said earlier this month it expected a second-quarter profit, but said it wouldn't meet its prior outlook of 43 cents to 57 cents a share. Write-downs lowered earnings by 44 cents a share, compared with just four cents a share a year earlier.
Revenue for the quarter ended April 30 fell 23% to $1.17 billion from $1.44 billion a year earlier. Analysts were looking for $1.12 billion.
Fiscal second-quarter net signed contracts fell 25% to $1.17 billion from $1.56 billion a year earlier. The company signed 2,031 contracts before cancellations in the period, down 14%. Toll Brothers reported earlier in May that second-quarter net orders fell 24% to 1,647.
Some of this loss is accounting -- lowering the value of assets on the balance sheet. My guess is Toll brothers is reporting as much bad news as possible to "get it out of the way."
However, the drop in revenue and contracts signed indicates one glaring fact: the housing market is still very weak.