HORSHAM, Pa. (AP) -- Toll Brothers' fiscal third-quarter profit took a hit from higher tax expense, but the luxury homebuilder is upbeat about the rebound in the housing market.
"Sales volumes and pricing power both increased this quarter from a year ago, a pattern consistent with recent quarters," CEO Douglas Yearley said in a statement Wednesday. "We believe the recovery is real, and we are in the early stages of the rebound."
The Horsham, Pa., company said net income fell 24% to $46.6 million, or $0.26 per share, in the three months that ended July 31. That matched analyst expectations. In the 2012 quarter, earnings came to $61.6 million, or $0.36 per share.
Last year's quarter included a tax benefit of nearly $19 million, while the company set aside $21.7 million for taxes in this year's quarter.
Revenue climbed 24%, to $689.2 million from $554.3 million. Analysts polled by FactSet predicted $699.1 million.
Toll Brothers operates in 19 states, including California, Florida, Illinois, and New York. It builds luxury homes mostly on land it develops. That includes single-family homes, resort-style golf communities and urban high-rises.
After slumping for years, the housing market has shown choppy but steady improvement this year. On Friday, the Commerce Department said that builders began work on houses and apartments at a seasonally adjusted annual rate of 896,000 in July. That was up 6% from June, though below a recent peak of more than 1 million in March.
And on Thursday the National Association of Home Builders/Wells Fargo builder sentiment index reported that confidence among U.S. homebuilders is at its highest level in nearly eight years, fueled by optimism that demand for new homes will drive sales growth into next year.
Still, there are indications that rising mortgage rates may give potential buyers a reason to pause.
Toll Brothers said its signed contracts in the quarter that just ended climbed 47% to $992.6 million, and the average price of homes it delivered rose 13% to $651,000. The average home price in this year's quarter got a boost from 16 deliveries at a high-rise building on Manhattan's Upper East Side.
Yearley had said earlier this year that the rebounding market has tamped down fears by builders that they would spook buyers if they raised prices.
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