By Christiana Sciaudone
Investing.com -- Has the housing boom petered out?
Toll Brothers (NYSE: TOL ) is down 8% after announcing disappointing first quarter delivery and gross margin guidance, BTIG said.
With higher than expected deliveries, the homebuilder reported earnings per share of $1.55, beating the average estimate of $1.23 on sales of $2.55 billion, versus the expected $2.07 billion for the fourth quarter.
The company provided guidance for first quarter deliveries of approximately 1,675 homes with an average price of between $780,000 and $800,000, with adjusted home sales gross margin of about 22.4%.
"The guide seems at least in part driven by strong volume already delivered in 4Q which renders backlog thinner. Expectations for a margin beat this quarter may also be playing a role,” said analyst Carl E. Reichard, according to FXEmpire.com.
For the fourth quarter, home building deliveries were 2,940, up 10%. Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 24%.
Shares are up some 230% since March, when markets crumbled as the reality of the Covid-19 virus revealed itself and the U.S. shut down for business. Rivals Lennar (NYSE:
) and PulteGroup Inc (NYSE:
) were also trading lower on Tuesday..
Americans have fled cities this year for the suburbs, driving up demand for homes outside of urban centers and pushing homebuilders higher.
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