"Buoyed by historic low interest rates and significant pent-up demand, we raised prices and accelerated per-community home sales paces as the housing market continued its recovery," said Toll Brothers CEO Douglas Yearley in a statement. The company benefits from a tight supply of existing homes.
Profits fell 77 percent to $94.9 million, or 54 cents per share, down from $411.4 million, or $2.35 per share in the year-ago period. Analysts anticipated 43 cents per share.
Revenues were up $1.04 billion, compared with $632.8 million a year earlier.
Contracts were flat for the beginning of the company's fourth quarter due to rising prices from political uncertainty. "In our fourth quarter, the impact of those price increases, combined with uncertainty from the political discord in Washington and a sudden rise in interest rates, contributed to a leveling of demand," Yearley said. But overall, low interest rates and increased confidence in the housing markets are padding Toll's bottom line.
[Wall Street Journal]