Toll Brothers Inc said on Wednesday that it expected to report a 51 percent drop in quarterly homebuilding revenue, but said new orders had improved from the prior period, reflecting a seasonal upturn.

Preliminary results for the second quarter ended on April 30 showed homebuilding revenue of about $398.3 million and an order backlog of about $944.3 million.

Analysts on average were expecting second-quarter revenue of $392.4 million for the luxury homebuilder, according to Reuters Estimates.

Horsham, Pennsylvania-based Toll said its signed contracts jumped 119 percent from the first quarter. The company attributed the rise to seasonal factors and a particularly weak first quarter that made comparisons easier.

Toll's cancellation rate improved to 21.7 percent in the quarter from 37.1 percent in the first three months of the year and 24.9 percent a year earlier.

Toll said it continued to mothball some sites and decrease the number of communities it develops, and estimated second quarter pretax writedowns between $90 million and $160 million.

That was higher than expected, said UBS analyst David Goldberg, who reduced estimates for the year to a loss of $1.15 per share from $1 as a result.

That said, we continue to believe Toll is well positioned, given its high quality land and liquidity, Goldberg said in a research note.

Toll shares were up 2.5 percent at $20 in light trading before the market opened.

The company plans to release full second-quarter results on June 3.

(Reporting by Nick Zieminski and Anurag Kotoky; Editing by Lisa Von Ahn)

Pennsylvania Investment