Toll Brothers Inc., the luxury home builder, today posted the first quarterly loss since it went public in 1986.

Robert I. Toll, chairman and chief executive of the Horsham-based builder said, in addition, that 2007 has been by many measures "the most challenging of the forty years that Toll Brothers has been in business."

The company reported a net loss of $81.8 million, or 52 cents per share, for the three months ending Oct. 31, compared with a net income of $173.8 million, or $1.07 per share, a year ago. The loss included $314.9 million in pretax writedowns, mainly for homes it could no longer sell at a profit. In the fourth quarter of 2006, pretax writedowns totaled $115 million.

Without the writedowns, Toll Brothers would have posted fourth-quarter earnings of 72 cents per share, less than half the $1.49 per share profit that was posted during the same quarter a year earlier. Analysts polled by Thomson Financial expected a loss of 77 cents per share. The predictions typically exclude one time charges or writedowns.

Revenue fell by 35 percent to $1.17 billion in the quarter, slightly ahead of Wall Street's forecast of $1.166 billion.

Shares were up 83 cents, or 4 percent, to $21.55 in morning trading on the New York Stock Exchange.

CEO Toll, said in a statement, "1974 was perhaps rougher, but the difficult times only lasted one year."

The housing market, after booming for several years, has been plagued by excess inventory, defaults in subprime mortgages and tightening of credit as lenders become choosier about borrowers.

In the quarter, Toll Brothers said net signed contracts fell by 48 percent to $365.3 million - a measure of future sales activity.

Fourth quarter cancellations were down to 417 units, compared to 585 units a year ago.

For its fiscal year, the company posted net income of $35.7 million, or 22 cents per share, compared with profits of $687.2 million, or $4.17 per share, in 2006. Revenue fell 24 percent to $4.65 billion. Net signed contracts dipped 33 percent to $3.01 billion.

Toll Brothers said it has streamlined operations to better match reduced business. Looking ahead, the company said the market is too volatile to provide earnings guidance. However, it expects to deliver between 3,900 and 5,100 homes in fiscal 2008 at around $630,000 to $650,000 per home.

This article contains material from the Associated Press.