* Second-quarter revenue rises 67 pct to $860.4 mln
* Average selling price rises 22 pct to $706,000
* Results impressive, reflected in company's
* Shares rise as much as 4 pct
(Adds link to graphic, updates share price in last two
By Sagarika Jaisinghani
May 28 Toll Brothers Inc's quarterly
profit more than doubled as a recovering housing market allowed
the largest U.S. luxury homebuilder to sell more homes at higher
prices, sending its shares up as much as 4 percent.
The company, whose homes can cost more than $2 million, has
been able to perform better over the past few quarters than most
large U.S. homebuilders as its buyers were less affected by a
recent rise in mortgage rates.
Toll's average selling price rose about 22 percent to
$706,000 in the second quarter ended April 30 - a period well
into the spring selling season, which is to homebuilders what
the holiday shopping season is to retailers.
Toll, which mainly builds single-family houses, handed over
1,218 homes in the quarter, up 36 percent from a year earlier.
While the company's sales remain strong, it decided last
year to build and rent apartments to cater to the demand for
rentals as higher interest rates and slow income growth pushes
home ownership out of reach for many Americans.
Permits to build multi-family housing such as apartment
blocks rose 19.5 percent in the United States last month,
compared with a 0.3 percent rise in permits for single-family
Toll said on Wednesday it had about 1,500 rental units under
construction and that it controlled sites for another 3,800.
Lennar Corp, the second-largest U.S. homebuilder, is
the only other builder that is offering apartment rental units.
Toll's net income soared to $65.2 million, or 35 cents per
share, in the second quarter from $24.7 million, or 14 cents per
share, a year earlier.
Revenue jumped 67 percent to $860.4 million. Orders stayed
almost flat at 1,749 homes, compared with a 6 percent fall in
the first quarter.
"We are in a leveling period in the early stages of the
housing recovery with significant pent-up demand building,"
Chief Executive Douglas Yearley said in a statement.
UBS analyst David Goldberg called the results impressive but
said they were already reflected in the company's valuation.
Toll trades at 17.7 times 12-months forward earnings, and is
expensive compared to an average of 14 times for top five U.S.
builders D.R. Horton Inc, Lennar, PulteGroup Inc
, NVR Inc and KB Home, according to
Thomson Reuters StarMine.
Toll's shares were up 2.2 percent at $36.43 in afternoon
trading, compared with a rise of less than 1 percent in the Dow
Jones U.S. Home Construction index.
Toll's shares had dropped about 2 percent in the 52 weeks to
Tuesday, compared with a 7 percent drop in the index.
(Additional reporting by Aurindom Mukherjee in Bangalore;
Editing by Gopakumar Warrier, Joyjeet Das and Savio D'Souza)