Toll Brothers Inc. (TOL) delivered impressive third-quarter financial results, exceeding analyst expectations and boosting confidence in the luxury homebuilding market. The company reported revenue of $2.73 billion, surpassing the consensus estimate of $2.71 billion, according to Benzinga Pro. Adjusted earnings per share reached $3.60, exceeding analysts’ predictions of $3.31. This positive performance reflects the continued strength in the housing market, driven by favorable demographics and an imbalance between supply and demand.
Revenue generated from home sales saw a 2% year-over-year increase, reaching $2.72 billion, driven by an 11% jump in homes delivered, totaling 2,814 units. The company also reported an 11% year-over-year increase in net signed contract value and contracted homes, reaching 2,490 units. However, the backlog, a measure of future sales, ended the quarter at $7.07 billion, down 10% year-over-year.
Douglas Yearley Jr., Chairman and CEO of Toll Brothers, expressed optimism about the company’s performance, stating that July was the strongest month of the quarter in terms of net signed contracts. He highlighted the positive impact of low mortgage rates, strong demographics, and the ongoing imbalance in the housing market, indicating a positive outlook for demand in the coming quarters.
Looking ahead, Toll Brothers anticipates delivering between 3,275 and 3,375 units in the fourth quarter. Adjusted home sales gross margin is expected to be around 27.5%. The company’s confidence in the market is evident in the raised full-year guidance for key homebuilding metrics. Toll Brothers expects to deliver between 10,650 and 10,750 units in full-year 2024, with an anticipated adjusted home sales gross margin of 28.3%. Earnings per share for the full year are projected to be between $14.50 and $14.75, exceeding analysts’ estimates of $14.20 per share.
Management will hold a conference call on Wednesday morning at 8:30 a.m. E.T. to discuss these results in detail.
In after-hours trading on Tuesday, Toll Brothers shares rose 0.81%, reaching $134.60, indicating investor confidence in the company’s future prospects.
