Toll sales climb on housing rebound

Toll Bros. Inc., the largest U.S. luxury-home builder, reported a jump in quarterly sales and orders as prices climbed amid a rebounding U.S. housing market.

Revenue for the three months through July increased 24 percent to $689.2 million, the Horsham company said Wednesday in a statement. Orders rose 26 percent to 1,405 houses, exceeding analysts' estimate for 24 percent growth, Adam Rudiger, an analyst at Wells Fargo & Co., wrote in a note to clients.

A tight supply of previously owned houses is driving up market demand for newly built properties. Toll, which mainly serves affluent buyers, is less vulnerable than competitors to rising mortgage rates, which have cooled orders at companies including D.R. Horton Inc., said Megan McGrath, a Stamford, Conn.-based analyst with MKM Partners L.L.C.

With "no indication of a slowdown in sales due to mortgage rates, we think these results should be good enough to boost the shares today," she wrote after the earnings report.

Toll's stock closed at $31.65 Wednesday, up 0.01 or 0.03 percent.

In the quarter, the company's profit fell, hurt by a tax expense of $21.7 million after a benefit of $18.7 million in the prior year. Net income was $46.6 million, or 26 cents a share, compared with $61.6 million, or 36 cents, a year earlier.

Home closings climbed 24 percent to 1,059. The average price jumped to $651,000 from $576,000 a year earlier, boosted by deals at Toll's luxury Touraine building in Manhattan. Excluding that property, the average price of homes delivered in the quarter was $612,000.

"Sales volumes and pricing power both increased this quarter from one year ago, a pattern consistent with recent quarters," chief executive officer Douglas Yearley Jr. said in the statement. "We believe the recovery is real, and we are in the early stages of the rebound."

The National Association of Realtors reported Wednesday that sales of previously owned homes jumped 6.5 percent in July to the fastest pace since November 2009.