What housing slowdown? Toll Brothers' sales leapMay 28, 2014: 8:20 AM ET
Luxury homebuilder reports better-than-expected profit and revenue growth.
FORTUNE -- Severe winter weather couldn't dent the strength of the luxury housing market early in 2014, as homebuilder Toll Brothers Inc. (TOL) reported its fiscal second-quarter net income more than doubled due to broad growth across all regions.
Toll Brothers reported better-than-expected profit and revenue growth for the latest quarter Wednesday. Many key metrics improved from a year ago, including a 36% jump in homebuilding deliveries. The average price of homes delivered climbed 22% to $706,000.
Heading into Toll Brothers' report, some data suggested the housing market's recovery has stalled in the U.S. -- a concern that picked up during the severe winter. The slowdown is worrisome for the industry as it heads into the key spring and summer home-buying seasons.
But Toll Brothers benefits from its exposure to the affluent Boston-to-D.C. corridor, as well as the development of for-sale condominium projects in New York City, northern New Jersey and Philadelphia. The company, known for building megahomes in the suburbs, has sought to develop properties in urban areas as more Americans are moving to cities. The company has also expanded over the past year in the California and Texas markets.
Toll Brothers strength contrasts with a S&P/Case-Shiller home price report this week, which signaled home prices in major U.S. cities are rising more slowly in the first few months of 2014. David Blitzer, chairman of the index committee at S&P Dow Jones Indices, on Tuesday said housing indicators are mixed even as mortgage rates are near a seven-month low.
For the quarter ended April 30, Toll Brothers reported an overall profit of $65.2 million, or 35 cents a share, up from last year's profit of $24.7 million, or 14 cents a share. Revenue soared 67% to $860.4 million.
Analysts surveyed by Bloomberg had expected a profit of 26 cents on revenue of $822 million.
Gross margin, excluding interest and write-downs, climbed to 23.6% from 23.3%.
Backlog totaled $3.21 billion, up 27% from a year ago. The company's net signed contracts increased 7% to $1.27 billion but was roughly flat on a units basis.