HORSHAM, Pa. (AP) -- Toll Brothers' second-quarter earnings jumped 46 percent as a rebounding economy and low interest rates drove sales at the luxury home builder.
The Horsham, Pa., company said the average price of homes delivered climbed 3.6 percent in the quarter to $577,000 compared with last year. That pricing power helped push net signed contracts up 57 percent, to $1.19 billion.
"Buyers who have been on the sidelines for six years are jumping in," CEO Douglas Yearley said. "Low interest rates, improved customer confidence, a strong stock market, rising home prices and a reawakening economy are stoking the demand that is fueling our luxury market."
The Commerce Department reported last week that applications for new construction breezed past a five-year peak, signaling a robust and sustained revival in the real estate sector.
The housing recovery appears to be very broad.
On Wednesday, the National Association of Realtors is expected to report that sales of previously occupied homes in April accelerated to a seasonally adjusted annual rate of nearly 5 million, something that hasn't happened in more than three years.
The rebounding market has tamped down fears by builders that they would spook buyers if they raised prices, Yearly said. Toll Brothers has found that as prices increase in many markets "a sense of urgency takes hold and demand continues to rise."
The company earned $24.7 million, or 14 cents per share, in the three months that ended April 30, despite recording a $16.3 million income tax expense. That compares with net income of $16.9 million, or 10 cents per share, in last year's quarter, when the company recorded a $1.2 million income tax benefit.
Revenue climbed 38 percent to $516 million.
Analysts expected, on average, earnings of 7 cents per share on $515.5 million in revenue.
The company said this year's second quarter also included a $13.2 million, pre-tax gain tied to a litigation settlement.
Shares of Toll Brothers Inc. climbed 3 percent, or $1.09, to $37.10 Wednesday before markets opened and after the company announced results.
Toll Brothers operates in 19 states, including California, Florida, Illinois and New York.
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