Luxury homebuilder Toll Brothers (NYSE: TOL) surpassed Q2 earnings and revenue estimates as the demand improved in the quarter. The company reported earnings of $0.87 per share on revenue of $1.72 billion. Wall Street had expected Toll Brothers to report earnings of $0.75 per share on revenue of $1.54 billion for the second quarter ended April 30, 2019. TOL stock was up about 1% initially during the extended trading hours and then turned into negative territory.
The Horsham, Pennsylvania-based company’s home sales revenue of $1.71 billion and 1,911 units rose 7% in dollars and 1% in units. The average price of homes in backlog was $875,500.
Also read: Home Depot reports better-than-expected Q1 results
Toll Brothers expects third quarter deliveries to be between 1,800 and 2,000 units with an average price of between $855,000 and $880,000. FY 2019 deliveries are expected to be between 7,700 and 8,100 units with an average price of between $855,000 and $880,000.
“FY 2019’s April contracts surpassed FY 2018’s April on both a gross and per-community basis. Although the Spring selling season bloomed late, it built momentum. We view this as a positive sign for the overall health of the new home market,” said CEO Douglas Yearley, Jr.
According to recent reports, builder sentiment in May rose to a 7-month high and single-family housing starts in April were up 6.2% versus March. The homebuilding industry is being buoyed by low interest rates, a strong employment picture, and a still-limited supply of new homes in many markets. The company expects to benefit from the positive macroeconomic backdrop, record low unemployment, continued wage growth, and solid consumer confidence.
Home improvement retailer Lowe’s Companies (LOW) will be reporting its Q1 results tomorrow before the market opens. The company’s marketing and merchandising efforts are expected to pay off in the first quarter.
Toll Brothers stock had gained 16% since the beginning of this year and dropped 12% in the past 52 weeks.
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