Toll Brothers ( TOL), a builder of luxury homes, reported second-quarter increases in sales and earnings, and the company said it was optimistic regarding its prospects for the rest of the year.

For the second quarter, Toll earned $52.9 million, or 72 cents a share, and revenue of $607.9 million. In the same quarter a year ago, the company earned $52.5 million, or 69 cents a share, with revenue of $550.5 million.

The company's second-quarter contracts were valued at $926.5 million, and its quarter-end backlog totaled $2.21 billion. Toll's second-quarter homebuilding revenue of $601 million rose 11% from $539.1 million in the year-ago period. The company delivered 1,109 homes in the second quarter, an increase of 2% from 1,086 last year.

"We believe the start of the selling season was delayed due to concerns about war and weather, which muted activity in February and March," Toll said in a press release. "This delay has given way to strong demand in April and May. The past four weeks have been among the best in our history for traffic and reservation deposits. These are leading indicators for future contracts and, ultimately, 10 to 12 months down the road, for deliveries and revenues. If the economy improves, notwithstanding an increase in interest rates, we believe our prospects will be even brighter."

The company also said that if the market remains as it is, "we believe we will deliver at least $3 billion in homebuilding revenues in 2004." At this point, Toll expects "record" earnings in both the third and fourth quarters and for the full 2003 fiscal year.

Analysts polled by Thomson First Call expected a profit of 68 cents in the second quarter. Analysts are forecasting earnings of 76 cents in the third quarter and $1.13 for the fourth quarter. For the year, analysts expect earnings of $3.20 a share.

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