Luxury homes builder Toll Brothers (TOL), which serves the "move-up, empty-nester, active-adult, and second-home buyers," topped analyst expectations for its fiscal fourth quarter.
Estimates: Adjusted earnings per share up 24% to 99 cents with revenue rising 25% to $1.79 billion.
Results: EPS excluding various items jumped 44% to $1.15. Revenue climbed 29% to $1.86 billion, as units delivered rose 22% to 2,224. Orders rose 20% to 1,728.
Outlook: Toll Bros. expects to deliver 1,000 homes to 1,250 homes in the current Q1 for an average price of $750,000-$780,000. It sees full-year deliveries of 6,500 homes to 7,500 homes with an average price of $775,000 to $825,000.
Toll said its November purchase of Coleman Homes, which sells homes at $300,000 or a little more, will reduce adjusted gross margins in 2017.
We are encouraged as we look to FY 2017," Chief Executive Douglas Yearley said in a statement. "We are seeing positive demand trends in many regions."
Stock: Shares rose 4.8% to 31.94 in the stock market today after closing up 3.9% to 30.47 on Monday. The stock has been trading above its key 50-day and 200-day moving averages. Toll has a potential buy point of 32.35.
The housing market has been strong this year thanks to wage growth as well as low interest and unemployment rates. But mortgage rates have climbed along with Treasury yields in recent weeks.
Last month, the Commerce Department reported housing starts jumped 25.5% in October to a nine-year high. But building permits ticked up just 0.3%, suggesting a sharp deceleration in activity later.
Hovnanian Enterprises (HOV) is out Thursday and analysts expect it to report an 19% drop in fiscal Q4 EPS to 13 cents but a 15.7% increase in revenue to $802.3 million.
Hovnanian shares were in a slump from early 2013. But the stock has taken off in recent weeks. Hovnanian rose 6.1% to 2.44 after jumping 5.9% Monday and 8.5% Friday, blowing through a cup base with a 2.11 buy point and hitting a 52-week high.
Among homebuilder stocks that have performed better in recent years, LGI Homes (LGIH) fell 2.5% to 31.52, trading between the 50-day line and its 200-day. LGI Homes focuses on entry-level homes, late Monday said November home closings rose 28.9% vs. a year earlier to 321.
KB Home (KBH) jumped 4.3% to 16.09 after climbing 2.4% on Monday, retaking its 50-day line. The stock is in a consolidation with a 16.86 potential buy point.
Home Depot (HD) fell 0.7% to 128.74. Home Depot has formed a handle in a cup base right at its 200-day line. The home improvement giant's buy point is 132.23. Home Depot hit a record high of 139 on Aug. 2.
