* Spring sales most robust since downturn began - CEO
* New orders jump 47 percent
* Sees 2012 deliveries at 2,700-3,200 units vs 2,611 in 2011
By A. Ananthalakshmi
May 23 Toll Brothers Inc, the largest
luxury homebuilder in the United States, reported a
better-than-expected quarterly profit and a strong jump in new
orders, helped by a robust spring selling season.
Deliveries jumped 14 percent to 671 units for the
February-April period. New orders - an indication of future
revenue - rose 47 percent to 1,290 units.
"It appears that the housing market has moved into a new and
stronger phase of recovery as we have experienced broad-based
improvement across most of our regions over the past six
months," Chief Executive Douglas Yearley said in a statement.
"The spring selling season has been the most robust and
sustained since the downturn began," the CEO said. The spring
season is to homebuilders what Christmas is to retailers.
Analyst Megan McGrath of MKM Partners said the market for
high-end homes is improving as customers are finally making a
move, encouraged by improvements in the housing and the credit
"Order growth was well above expectations," she said. "There
is a pent-up demand in luxury market even in a relatively weak
Toll targets affluent customers who typically make at least
$100,000 a year and have spotless credit records. It is the only
publicly-traded luxury homebuilder.
Toll's earnings report follows strong results from other
U.S. homebuilders, including D.R. Horton and Lennar
Recovery in the U.S. housing industry has gained momentum in
Housing starts last month rose across the board, while
residential construction in the first quarter grew at its
fastest pace in nearly two years and is expected to contribute
to economic growth this year, for the first time since 2005.
STRONG TRENDS IN MAY
Horsham, Pennsylvania-based Toll said non-binding
reservation deposits for the first three weeks of May were up 39
percent. Typically, half of deposits translate into actual house
The company expects to deliver 2,700 to 3,200 homes for the
full year 2012. It delivered 2,611 units in 2011.
Toll posted a second-quarter profit of $16.9 million, or 10
cents a share, compared with a loss of $20.8 million, or 12
cents a share a year ago.
Revenue rose 17 percent to $373.7 million.
Analysts had expected earnings of 4 cents per share on
revenue of $382 million, according to Thomson Reuters I/B/E/S.
The company also expects to deliver 10 percent more homes in
the fourth quarter compared to the third.
Toll shares rose 4 percent to $28.06 - their highest in
nearly 5 years - on Wednesday on the New York Stock Exchange.
They have nearly doubled in value since October 2011.