Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Toll Brothers revenue jumps as home sales, prices rise

Published 05/24/2016, 10:50 AM
Updated 05/24/2016, 10:50 AM
© Reuters. A single family home is shown under construction by Toll Brothers Inc, the largest U.S. luxury homebuilder, in Carlsbad, California

© Reuters. A single family home is shown under construction by Toll Brothers Inc, the largest U.S. luxury homebuilder, in Carlsbad, California

By Arunima Banerjee

(Reuters) - Toll Brothers Inc's (N:TOL) quarterly revenue jumped nearly 31 percent as the company sold more luxury homes at higher prices, underscoring a steady growth in the U.S. housing market.

New U.S. single-family home sales surged to an over eight-year high in April and prices hit a record high, offering further evidence of a pickup in economic growth, according to data released on Tuesday.

Shares of Toll Brothers, which mostly builds high-end single-family homes, rose as much as 6.8 percent to $28.93 in late morning trading. Shares of other U.S. homebuilders Lennar Corp (N:LEN), D.R. Horton Inc (N:DHI) and PulteGroup Inc (N:PHM) also rose after the strong home sales data.

Toll Brothers' orders increased 3.2 percent to 1,993 homes in the second quarter. The period falls in the spring selling season, an important time for homebuilders.

Orders are a key metric of future revenue for homebuilders,

"...the drivers are in place to sustain the current housing market's slow but steady growth. Interest rates remain low, the job picture continues to improve," Executive Chairman Robert Toll said.

Lennar, D.R. Horton and PulteGroup have also reported strong quarterly results due to higher demand.

STRONG NUMBERS

Toll Brothers said it expected to sell 5,800-6,300 homes in the year ending Oct. 31. The company had earlier forecast home sales of 5,700-6,400.

It also raised the lower end of its average selling price forecast for the year to $820,000 from $810,000, maintaining the higher end at $850,000.

In the quarter ended April 30, Toll Brothers sold 1,304 homes at an average price of $855,500. This compared to 1,195 homes at $713,500, a year earlier.

The company's home sales in California soared 80 percent, while sales in the West markets, which include Arizona, Colorado, Nevada and Washington, increased by a quarter.

Orders in California, however, fell 25.3 percent as some of the company's projects in the region are nearing sellout, leaving limited inventory available for sale.

Its net income jumped 31 percent to $89.1 million, or 51 cents per share, beating the average analyst estimate of 46 cents per share, according to Thomson Reuters I/B/E/S.

© Reuters. A single family home is shown under construction by Toll Brothers Inc, the largest U.S. luxury homebuilder, in Carlsbad, California

Revenue rose for the third straight quarter to $1.12 billion, topping the average estimate of $1.04 billion.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.