May 27, 2020 / 9:00 PM / a month ago

Luxury homebuilder Toll Brothers scraps 2020 forecast on COVID-19 woes

FILE PHOTO: A Toll Brothers housing development is shown in Carlsbad, California, U.S., May 21, 2018. REUTERS/Mike Blake

(Reuters) - U.S. luxury homebuilder Toll Brothers Inc (TOL.N) on Wednesday withdrew its full-year forecast and warned it would not provide such guidance for the foreseeable future due to uncertainty caused by the COVID-19 pandemic.

However, shares rose 8.8% to $35.90 in extended trading after the company’s quarterly results beat Wall Street expectations.

“Our second quarter was essentially bifurcated by the impact of Covid-19,” Chief Executive Douglas Yearley said in a statement.

Economic data showed at least 21.4 million people lost their jobs in March and April due to the coronavirus outbreak, and home sales plunged in April despite record low mortgage rates.

Pennsylvania-based Toll said the average home price fell about 12% to $788,500 from a year earlier, while the number of homes sold rose to 1,923 units from 1,911 units.

The company’s net income fell to $75.7 million, or 59 cents per share, in the second quarter ended April 30, from $129.3 million, or 87 cents per share, a year earlier.

Revenue fell 9.8% to $1.55 billion.

Analysts on average had expected earnings of 45 cents per share and revenue of $1.5 billion, according to IBES data from Refinitiv.

Larger rivals, D.R. Horton Inc (DHI.N), Lennar Corp (LEN.N) and PulteGroup (PHM.N) have also abandoned their full-year financial targets citing order cancellations.

Reporting by Sanjana Shivdas and Devbrat Saha in Bengaluru; Editing by Amy Caren Daniel

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