Luxury-home builder Toll Brothers (TOL) - Get Report, battered by the coronavirus pandemic shutdown, beat Wall Street's second-quarter-earnings expectations and reported encouraging signs from recent deposit activity.
Shares of the Horsham Pa., company at last check were down 0.9% to $32.70.
For the quarter ended April 30 Toll Brothers reported net income of $75.7 million, or 59 cents a share, down from $129.3 million, or 87 cents, in the year-earlier quarter. The latest figure beat the Refinitiv estimate of 45 cents a share.
Revenue totaled $1.55 billion, down from $1.72 billion a year earlier. The Refinitiv estimate called for revenue of $1.5 billion.
The company said it was withdrawing its 2020 guidance due to the uncertainty caused by the coronavirus outbreak "and will suspend providing such guidance for the foreseeable future."
Chairman and Chief Executive Douglas Yearley Jr. said in a statement that "our second quarter was essentially bifurcated by the impact of Covid-19."
Government stay-at-home and business-closure orders in such locations as Pennsylvania, New Jersey, New York City and its suburbs; Connecticut; Massachusetts; Michigan; metro Seattle and California, "made it especially challenging to sell, construct and deliver homes," he said.
Restrictions have eased and sales and construction operations have resumed in almost all of the company's markets.
"While net signed contracts in the first four weeks of May were down 37% year-over-year, we are very encouraged by recent deposit activity," Yearley said.
"Our deposits, which typically precede a binding sales contract by about three weeks and represent a leading indicator of current market demand, were up 13% over the past three weeks versus the same three-week period last year."
Yearley said the recent deposit-to-contract conversion ratio has remained consistent with pre-covid-19 levels.
Web traffic has improved from the lows seen in mid-March and "has returned to the same strong activity we enjoyed pre-covid-19 in February," he added.