Toll Brothers (TOL) reported a 30% jump in earnings for the third quarter as an 18% increase in home deliveries, as well as strong revenue growth in California, West, South Mid-Atlantic and North regions, drove revenue higher. Shares of the luxury homes builder climbed more than 9% in the premarket session after revenue and earnings exceeded analysts’ expectations.
Net income grew to $193.3 million or $1.26 per share from $148.6 million or $0.87 per share a year ago. Quarterly revenue climbed 27% to $1.91 billion, helped by an 18% growth in home building deliveries, which stood at 2,246 units.
Net signed contract value increased 12% to $2.03 billion as contract units rose by 7%. Backlog value at the end of third-quarter climbed 22% to $6.48 billion as units grew 13% to 7,100.
California revenues climbed 82% and it still remained the company’s largest revenue-generating region. The North, the Mid-Atlantic, the South, and the West regions were up 18%, 8%, 18%, 24%, respectively. California and the Western region, combined, produced more than 50% of total revenues, reflecting the health of the new home industry in general and its unique position in the luxury market.
Related: Toll Brothers Q2 earnings miss Street’s expectations
Looking ahead into fiscal 2018, the Horsham, Pennsylvania-based company expects to deliver 8,100 to 8,400 units with an average price of between $835,000 and $860,000. Toll Brothers predicts revenue of $6.76 billion to $7.22 billion, the adjusted gross margin of about 24% of revenue, and selling, general and administrative expenses as a percentage of revenue of about 9.8%.
For the fourth quarter, Toll Brothers expects deliveries of 2,550 to 2,850 units with the average price ranging between $840,000 and $870,000. The company sees adjusted gross margin of 24.8%, SG&A of about 8.1%, and a tax rate of about 28.5%.
Shares of Toll Brothers ended Monday’s regular trading session up 0.96% at $34.73 on the NYSE. However, the stock has dropped about 28% for the year-to-date and about 9% in the past year.