Toll Brothers raises forecasts after strong quarterly results

Toll Brothers turned in a better-than-expected set of quarterly results on Tuesday, leading it to raise its revenue and home sales forecasts for the full year thanks to strong demand for its luxury homes.

Toll's net income jumped 30% to $193.3m in its third trading quarter, while revenue shot up 27.3% to $1.91bn - smashing analysts' expectations of $1.81bn.

The homebuilder's average selling price for a new home increased 7.6% to $851,900 over the three months leading to 31 July, the most in a year.

Orders were strong as well, with the total for the quarter rising to 2,316 homes, a 7.1% year-on-year increase, with an impressive 2,246 homes having been sold during the period, 18.3% more than over the same time span a year earlier.

Gross margins slipped to 21.1% from 21.7% on the back of climbing labour and raw materials costs.

Toll said it anticipates full-year revenues to be between $6.76bn and $7.22bn, ahead of the earlier forecast figures of $6.64bn to $7.31bn.

Executive chairman Robert Toll said, "We believe there is room for continued growth in the new home market in the coming years."

As of 1420 BST, Toll Brothers shares had surged 9.21% in pre-market trading to $37.93 each.