Toll Brothers sees 2019 home sales below estimates
(Adds 2019 home sales forecast, shares; compares with
May 21 (Reuters) - U.S. luxury homebuilder Toll Brothers Inc
forecast 2019 home sales below analysts' estimates and
said it expected its margins to be squeezed by slowing demand
and rising incentives.
Shares of the company reversed course to fall 2% in extended
trading, as orders, an indicator of future revenue, fell 9.1% to
2,424 homes in the second quarter ended April 30.
The company forecast 2019 home sales of between 7,700 and
8,100 homes in 2019. Analysts on average expected Toll to sell
8,103 homes, according to IBES data from Refinitiv.
Full-year adjusted home sales gross margins are expected to
slip to about 23% from 23.7% it reported in 2018.
"Our guidance for adjusted home sales gross margin during
the balance of the year reflects the slower demand and rising
incentives associated with the challenging sales environment of
the fall and winter as well as changes in mix," Chief Financial
Officer Martin Connor said.
For the latest quarter, the Pennsylvania-based Toll Brothers
said average home price rose to $895,900 from $847,900 a year
earlier, while the number of homes sold rose to 1,911 homes from
U.S. housing starts increased more than expected in April
and activity in the prior month was stronger than initially
thought, suggesting declining mortgage rates were providing some
support to the struggling housing market.
The company's net income rose to $129.3 million, or 87 cents
per share, in the reported quarter from $111.8 million, or 72
cents per share, a year earlier.
Revenue rose to $1.72 billion from $1.60 billion.
Analysts on average had expected earnings of 75 cents per
share and revenue of $1.54 billion for the reported quarter.
(Reporting by Sanjana Shivdas in Bengaluru; Editing by Anil
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