February 23, 2016 / 10:15 AM / 2 years ago

Higher prices help Toll Brothers beat revenue estimates

A Toll Brothers home under construction is seen in Broomfield, Colorado February 25, 2014. REUTERS/Rick Wilking

(Reuters) - Toll Brothers Inc (TOL.N), the largest U.S. luxury homebuilder, reported a higher-than-expected 8.8 percent rise in quarterly revenue, as it sold homes at higher prices, and said it was optimistic about the spring selling season.

Low interest rates and a steady rise in employment have allowed homebuilders to raise prices.

Toll Brothers, whose homes can cost more than $2 million, said orders rose 17.6 percent to 1,250 homes in the first quarter ended Jan. 31.

“The stock market seems to be pricing in a steep decline in the economy and, along with it, our sector,” Executive Chairman Robert Toll said in a statement.

“We, on the other hand, are seeing signs that reflect strength and positive momentum in our business.”

Toll Brothers said it now expected to sell 5,700-6,400 homes in 2016, compared with 5,600-6,600 estimated previously.

The company also raised the low end of its 2016 average selling price forecast to $810,000-$850,000, from $800,000-$850,000.

Revenue rose to $928.6 million from $853.5 million a year earlier.

The company’s net income fell to $73.2 million, or 40 cents per share, from $81.3 million, or 44 cents per share, a year earlier.

Analysts on average had expected first-quarter earnings of 40 cents per share on revenue of $916.3 million, according to Thomson Reuters I/B/E/S.

Reporting by Radhika Rukmangadhan and Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta and Anil D'Silva

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