Toll Bros. Inc., the largest U.S. luxury home builder, reported revenue that exceeded analysts' projections and said it was starting to see buyers return to the market for new houses.
Fiscal third-quarter home-building revenue declined 34% to $796.5 million, and Toll had the lowest quarterly total cancellations in more than two years. The company was projected to have sales of $735 million, according to an analyst survey by Bloomberg.
"We believe there is growing pent-up demand from those who have postponed buying during the past almost three years," Chief Executive Robert Toll said. Federal housing relief programs may provide "an incentive to new customers to move off the fence and become first-time buyers."
The cancellation rate in the quarter was 19.4%, down from 23.8% a year earlier. The backlog of houses under contract and not yet sold fell 52% to $1.75 billion from a year earlier. Net contracts dropped 35% to $469.7 million. The number of contracts signed fell 27% to 812.
Toll shares rose 20 cents to $20.84. Toll will report complete earnings Sept. 4.