Toll Brothers misses profit estimates as lower prices weigh, shares fall
Feb 25 (Reuters) - U.S. luxury homebuilder Toll Brothers Inc missed Wall Street estimates for quarterly profit on Tuesday, as lower prices weighed on margins, sending its shares down 8% in extended trading.
The company also forecast full-year home sales to be between 8,600 and 9,100 units. Analysts expected deliveries of 8,773 units, according to Refinitiv data.
Pennsylvania-based Toll said the average home price fell 6.6% to $805,300 from a year earlier, while the number of homes sold rose to 1,611 units from 1,530 units.
"The adjusted gross margin in the first half of FY 2020 will continue to reflect the challenging sales environment," Chief Executive Officer Douglas Yearley said in a statement.
Adjusted gross margin in the quarter fell to 20.9%, from 24.2% a year ago. Costs, which include raw material and labor costs, rose 1.5%.
The company's net income fell to $56.9 million, or 41 cents per share, in the first-quarter ended Jan. 31, from $112.1 million, or 76 cents per share, a year earlier.
Analysts on average had expected earnings of 46 cents per share on revenue of $1.45 billion.
Revenue fell 2.3% to $1.33 billion during the quarter. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Shailesh Kuber)
