Toll Brothers, Inc., the nation’s leading builder of luxury homes, today announced results for its second quarter ended April 30, 2019: net income and earnings per share were $129.3 million and $0.87 per share diluted, compared to net income of $111.8 million and $0.72 per share diluted in FY 2018’s second quarter;  pre-tax income grew 15% to $176.2 million, compared to $152.7 million in FY 2018’s second quarter.

Douglas C. Yearley, Jr., Toll Brothers’ chairman and chief executive officer, stated: “We are pleased with this quarter’s results, which exceeded our expectations for revenues, margins, and profits.  Revenues, net income and earnings per share rose 7%, 16%, and 21%, respectively, compared to one year ago.

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“We are encouraged by the improvement in demand as the quarter progressed.  FY 2019’s April contracts surpassed FY 2018’s April on both a gross and per-community basis.  Although the Spring selling season bloomed late, it built momentum.  We view this as a positive sign for the overall health of the new home market.

“We continue to look for opportunities to grow and leverage our industry-leading brand as we expand our geographic footprint, product lines, and price points. Yesterday, we announced our entry into metro Atlanta with the acquisition of Sharp Residential.  Atlanta was the largest U.S. housing market where we did not operate, and Sharp was one of Atlanta’s largest private home builders. This quarter we also opened our first communities in Salt Lake City, Utah and Portland, Oregon, which are markets we have entered organically and where we are already seeing healthy buyer interest.

“According to recent reports, builder sentiment in May rose to a 7-month high and single-family housing starts in April were up 6.2% versus March.  The industry is being buoyed by low interest rates, a strong employment picture, and a still-limited supply of new homes in many markets.  With a positive macroeconomic backdrop, record low unemployment, continued wage growth, and solid consumer confidence, we are optimistic about the opportunities ahead.”

Martin P. Connor, Toll Brothers’ chief financial officer, stated: “In our second quarter, we delivered strong home building revenues and profit margins. 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.

“We remain well positioned to take advantage of strategic opportunities.  We ended the quarter with significant liquidity and conservative leverage.  We had $924.4 million in cash and cash equivalents and $1.12 billion available under our $1.295 billion, 20-bank revolving credit facility.  Our debt-to-capital ratio was 42.5% and our net debt-to-capital ratio was 34.6%.  Last Thursday, S&P Global Ratings upgraded their outlook on our credit rating from stable to positive. We believe this upgrade reflects positively on our strategy to balance growth with prudent financial management.”

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