Toll Brothers
stock was rising after the company reported fourth-quarter and full-year earnings that beat analyst expectations. The home builder expects lower inflation and mortgage rates to add to demand for new homes.
Toll Brothers said it earned $4.11 earnings a diluted share on revenue of roughly $3 billion in its fourth quarter, for fiscal-year earnings of $12.36 a diluted share on roughly $10 billion in revenue. Analysts had expected earnings of $3.72 a share on about $2.8 billion in sales in the quarter, and full-year earnings of $11.97 a share on about $9.7 billion in revenue, according to FactSet.
Investors appeared pleased with the results. Shares were up 3.5% in premarket trading Wednesday.
Mortgage rates’ recent decline is an encouraging sign for the spring selling season, Toll Brothers Chairman and Chief Executive Officer Douglas C. Yearley, Jr., said in a statement. “With resale inventories at historic lows, buyers continue to be drawn to new homes, and we expect lower rates with lower inflation to add to this already solid demand,” Yearley said.
“Our strategy of broadening our home offerings to include lower price points, coupled with our focus on increasing our supply of spec homes and growing our community count, has positioned us well for this market,” he said.
The company delivered 2,755 homes in the quarter and contracted 2,038 homes, bringing 2023’s fiscal-year total to 9,597 deliveries and 8,077 homes under contract. The company expects deliveries to grow in the new year: it foresees delivered homes in a range of 9,850 to 10,350 in 2024. Its community count is set to increase about 10%, to 410, by the end of next year.
“Over the long-term, the outlook for the new home market remains bright,” Yearley said, citing the nation’s aging housing supply, supportive changes in demographics, and an imbalance between high demand and low supply. Toll Brothers will further discuss its results on a Wednesday morning call.
Write to Shaina Mishkin at [email protected]
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