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 Shares of Toll Brothers, which mostly builds single-family homes
that could cost more than $2 million, rose 2 percent in premarket
trading on Tuesday.
New U.S. single-family home sales rose more than expected in April
and the median price surged, suggesting the housing market recovery
was gaining traction.
Toll Brothers' orders, a key metric of future revenue for
homebuilders, increased 3.2 percent to 1,993 homes in the second
quarter - a period well into the spring selling season, which is to
homebuilders what the holiday shopping season is to retailers.
"We continue to believe the drivers are in place to sustain the
current housing market's slow but steady growth," Executive Chairman
Robert Toll said in a statement. "Interest rates remain low, the job
picture continues to improve."
Other U.S. homebuilders such as Lennar Corp <LEN.N>, D.R. Horton Inc
<DHI.N> and PulteGroup Inc <PHM.N> have also reported strong
quarterly results due to higher home sales.
STRONG NUMBERS
Toll Brothers said it now expected to sell 5,800-6,300 homes in the
year ending Oct. 31. The company had earlier forecast homes 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, leaving the higher end
unchanged 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.
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The company said home sales in California soared 80 percent to 216. Sales in the
West markets, which include Arizona, Colorado, Nevada and Washington, increased
about 25 percent.
Orders in California, however, fell 25.3 percent, reflecting a temporary lack of
inventory.
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.
Revenue rose for the third straight quarter to $1.12 billion, topping the
average estimate of $1.04 billion.
Toll Brothers shares were trading at $27.65 before the bell.
Up to Monday's close, the stock had fallen about 19 percent this year, while the
Dow Jones U.S. home construction index had declined 7.3 percent.
(Reporting by Arunima Banerjee in Bengaluru; Editing by Biju Dwarakanath, Sunil
Nair and Kirti Pandey)
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