updated 8/8/2007 2:02:54 PM ET 2007-08-08T18:02:54

Luxury homebuilder Toll Brothers Inc. reported a 21 percent decline in preliminary homebuilding revenues for the third quarter and said the housing market is so volatile, it won’t give earnings guidance.

Its earnings nonetheless beat analysts expectations and its stock price rose on the news.

Robert Toll, the homebuilder’s usually ebullient and candid chief executive, remains cautious. Nearly two years into the housing slump, which started with defaults by subprime borrowers, most markets remain weak, he said in a statement.

“With the uncertainties roiling the mortgage markets right now, the pace of home sales could slow further until the credit markets settle down,” he said.

Analysts said Toll Brothers, which has a mortgage-lending business, isn’t as directly affected by subprime borrower problems, but it does have greater exposure to buyers with jumbo loans and those stretching for loans larger than their incomes justify

Toll, the nation’s largest building of luxury homes, expects to report third-quarter homebuilding revenue of $1.21 billion for the quarter, down from $1.5 billion for the same quarter last year, when it releases earnings on Aug. 22.

Analysts surveyed by Thomson Financial on average were expecting revenue of $1.08 billion.

“Things could have been worse,” said Greg Gieber, an analyst with A.G. Edwards. “Orders have fallen back to where they were before the boom.”

Net signed contracts or orders, a measure of future activity, fell 31 percent to $727.1 million. Cancellations rose to 23.8 percent in the quarter, compared with 18 percent in the prior year.

The backlog, a sign of past activity, fell by 34 percent to $3.67 billion.

Toll Brothers said it’s taking pretax writedowns in the quarter ranging from $125 million to $175 million on homes it can’t sell for a profit, as well as land options the company is abandoning.

The Horsham, Pa.-based homebuilder is also retrenching: Toll Brothers is postponing the opening of new communities in weak markets and cutting the amount of land owned or optioned.

In the third quarter, Toll Brothers said revenues in its Western region — Arizona, California, Colorado and Nevada — were hit the hardest, down 24 percent to $321.7 million.

The North, comprising Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, New York and Rhode Island, was down 22 percent to $293.4 million. Close behind is the Mid-Atlantic states of Pennsylvania, Delaware, Maryland, Virginia and West Virginia, down 21.6 percent to $350.7 million.

The South — Florida, the Carolinas and Texas — fell 14 percent to $242.2 million.

The West could continue to struggle going forward, with signed contracts down 41 percent, followed by the South at 37 percent, the Mid-Atlantic by 28 percent and the North by 19 percent.

In July, homebuilder D.R. Horton Inc. posted a third-quarter loss of $823.8 million, or $2.62 a share, compared with a profit of $292.8 million, or 93 cents, a year ago.

Beazer Homes USA Inc. also swung to a loss from a profit in the third quarter as revenue fell 37 percent to $761 million and home closings plummeted by 36 percent.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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