Thursday, December 6, 2012 / by Carlos J Higareda
Luxury homebuilder Toll Brothers Inc. is being considered one of the top performers in the home-building sector, reports The Wall Street Journal. The homebuilder saw its quarterly profits surge, with its home building rising across all regions.
The Northeast makes up 60 percent of Toll Brothers’ business and, given the devastation caused by superstorm Sandy in October, some analysts were worried how the storm would bite into Toll Brothers’ profits. But the homebuilder reported that in the fiscal fourth quarter, net signed contracts were up 75 percent compared to a year earlier and at their highest level for any fiscal year since 2006.
"Pent-up demand, rising home prices, low interest rates, and improving consumer confidence motivated buyers to return to the housing market in [fiscal] 2012," says Chief Executive Douglas Yearley. "As household formations accelerated and unsold home inventories dropped to record lows, the industry took further steps toward a sustained housing recovery."
Toll Brothers reported a profit of $411.4 million for the quarter ending Oct. 31, compared with $15 million a year earlier. A large tax benefit helped lift profits, with the latest quarter reflecting a net tax benefit of $350.7 million.
The homebuilder’s revenue climbed the most in the North by 39 percent, followed by 37 percent in the Mid-Atlantic region. The company’s average price of homes delivered was $582,000 in the fourth quarter compared to $565,000 a year prior.
Source: “Tax Benefit Boosts Toll Brothers’ Profit,” The Wall Street Journal (Dec. 4, 2012)