Jim Cramer Explains Why Toll Brothers Isn't His Favorite Homebuilding Stock
Toll Brothers reported earnings.
The company reported revenue of $1.65 billion, which surpassed analysts’ expectations of $1.55 billion.
Its announced earnings of $0.90 per share, which also beat Wall Street's estimates of $0.71.
During the quarter, the number of purchase contracts jumped 26% to 2,833 year-over-year while the total contract value climbed 18%.
“Our third-quarter net signed contracts were our highest third quarter ever in both units and dollars, and our contracts per community, at 8.5, were the highest third quarter in fifteen years.” He further stated that “We attribute the surge in demand to a number of factors, including historically low-interest rates, a continued undersupply of homes, and consumers focused more than ever on the importance of home," said Toll Brothers CEO Douglas Yearley.
Earnings from Toll Brothers comes after Wall Street got data from U.S. new-home sales, which reached a 14-year high in July as low mortgage rates and a suburban construction boom helped fuel 13.9% month-to-month growth.
In July the annualized rate of 901,000 was up from a revised 791,000 estimate. The latest figure is the highest since July 2006.
The median forecast of economists polled by Bloomberg was a sales rate of 790,000.
The median selling price rose 7.2% year over year to $330,000.
Record low borrowing costs have helped fuel the housing boom, as has an exodus from major cities as companies turn to remote working in order to socially distance their employees.
Home purchases jumped 58.8% in the Midwest, 13% in the South and 7.8% in the West. Meanwhile, home sales fell 23.1% in the Northeast.
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