This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Toll Brothers' Earnings Show Housing Boom for Wealthy: StockTwits

NEW YORK (TheStreet) -- There's a housing boom again. At least, for the wealthy.

Luxury homebuilder Toll Brothers (TOL - Get Report) reported Wednesday that sales rose 67% in the second quarter to $860.4 million. Those results beat consensus estimates by nearly $30 million and showed the strength of housing demand -- for new homes priced above half-a-million dollars in notoriously expensive markets like New York and California.

Another win for the housing recovery. $TOL handily beat forecasts and signed contracts were up 7% in the latest quarter. $XHB $ITB

? catherine tymkiw (@ctymkiw) May. 28 at 07:12 AM

Toll Brothers' profits underscored the strength of demand for high-end new homes. The company reported earnings per share of 35 cents for the quarter, more than double its earnings for the same period a year ago. Toll Brothers' earnings also blew past the consensus call for 26 cents per share.

Some on StockTwits.com said the results indicated good things to come from homebuilders in general -- and the housing market. New home sales rose 6.4% in April from March, according to a May report by the Commerce Department. That increase beat economist consensus estimates.

$TOL profit more than doubles as deliveries surge; should be a positive catalyst for home builders $XHB $ITB http://stks.co/b0bI2

? Ben Silverberg (@silverjet2) May. 28 at 06:39 AM

Toll Brothers was able to deliver such profit outperformance by raising prices. Operating margin expanded from 3.2% in the second quarter of 2013 to 7.9% in the prior quarter. The average price of homes sold in the quarter rose to $706,000 from $577,000 in the same period last year. They also rose from the first quarter's $694,000 average selling price.

"As expected, we saw significant positive leverage in our operating margin, which grew to nearly 8%," said Toll Brothers' Chief Financial Officer Martin P. Connor in a statement. "We note that the average price of new signed contracts in the current quarter declined from the last quarter as a result of some changes in geographic and product mix, but not from additional incentives."

Toll Brothers' shares rose more than 4% in premarket trading. The S&P Homebuilders Index (XHB) edged higher yesterday.

Toll Brothers said it expects to deliver between 5,100 and 5,850 homes this year at an average price of between $690,000 and $720,000 per home. The anticipated average price is higher than the previously provided range.

>>Read More: Step Inside the Inner Workings of Swiss Watch King Swatch

>>Read More: Target Doesn't Have Gregg Steinhafel to Kick Around Anymore

>>Read More: US Bancorp Is the Best Big Bank That Everyone Should Be Talking About

At the time of publication the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
TOL $36.64 0.00%
AAPL $113.29 0.00%
FB $91.01 0.00%
GOOG $630.38 0.00%
TSLA $248.48 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs