(Reuters) - Toll Brothers Inc beat analysts’ estimates for quarterly revenue and profit on Tuesday, as the U.S. luxury homebuilder sold more homes at higher prices, sending its shares up 3.2 percent in extended trading.
The U.S. housing market had a difficult 2018 due to higher interest rates and home prices. Homebuilding tumbled to a more than two-year low in December as construction of both single and multi-family housing declined.
But there are signs that the outlook for the housing market is improving. Mortgage rates eased toward the end of 2018, with the 30-year benchmark near a 10-month low, and data showed that U.S. mortgage applications increased for the first time in five weeks in the week ended Feb. 15. House price inflation has also moderated.
In a nod to the changing market conditions, Toll Brothers did not provide a full-year 2019 forecast, sticking to giving expectations for the current quarter.
“Nationally, the economy remains healthy, unemployment is low, and housing supply is still tight. Many of our potential customers have benefited from a strong stock market and enjoy increased equity in their existing homes,” Chief Executive Officer Douglas Yearley said in a statement.
Revenue rose about 16 percent to $1.36 billion in the first quarter ended Jan. 31.
The company’s net income fell to $112.1 million, or 76 cents per share, from $132.1 million, or 83 cents per share, a year earlier, when it recorded a benefit related to the U.S. tax reform.
Analysts on average had expected earnings of 61 cents per share and revenue of $1.26 billion.
Pennsylvania-based Toll Brothers said average home price rose to $862,300, from $826,000 a year earlier, while the number of homes sold rose to 1,530 from 1,423.
However, the company said orders, a key indicator of future revenue, fell 24.3 percent to 1,379 units in the three months ended Jan. 31. Toll Brothers reported its first fall in home orders in more than four years in the fourth quarter.
The company forecast second-quarter home deliveries between 1,650 and 1,850 units, below the 1,894 homes currently expected by analysts.
Reporting by Rachit Vats and Manogna Maddipatla in Bengaluru; Editing by Sriraj Kalluvila