(Bloomberg) -- Toll Brothers Inc. reported quarterly sales and profit that missed estimates, sending the homebuilder’s shares lower in late trading.
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- Earnings per share amounted to 41 cents, while the average analyst estimate was 45 cents. The company’s revenue from home sales was $1.3 billion, missing the $1.45 billion estimate.
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Key Insights
- The company’s focus on expensive homes puts it at a disadvantage to competitors that offer affordability. Still, sales in all price ranges are rebounding as a result of mortgage rates that have tumbled to near-record lows.
- Toll’s push to drive sales by offering incentives pressured profit margins. The adjusted home sales gross margin was 20.9% in the quarter, lower than the company’s own guidance of 21.25% issued in December. Toll had said that would be the low point of its fiscal year.
- The market has improved since the contracts for those sales were signed. Purchase agreements in the current quarter jumped 31% from a year earlier to 1,806, beating estimates.
Market Reaction
- The shares slipped as much 9.5% to $40.10 in late trading in New York. Stocks have been hammered the past two days on fears about the coronavirus.
Get More
- Click here to read Toll’s earnings statement.
- The company will hold a conference call Wednesday at 11 a.m. New York time.
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