HORSHAM, PA -- Toll Brothers, Inc., the nation's leading builder of luxury homes, said third quarter net income rose 110% to $97.7 million, compared to $46.6 million in FY 2013's third quarter.
Revenues of $1.06 billion and homebuilding deliveries of 1,444 units rose 53% in dollars and 36% in units, compared to FY 2013's third-quarter totals of $689.2 million and 1,059 units. The average price of homes delivered was $732,000, compared to $651,000 in FY 2013's third quarter.
Net signed contracts of $949.1 million and 1,324 units decreased 4% in dollars and 6% in units, compared to FY 2013's third-quarter totals of $992.6 million and 1,405 units. The average price of net signed contracts was $717,000, compared to $707,000 in FY 2013's third quarter.
Douglas C. Yearley, Toll Brothers' chief executive officer, stated: "Revenues and earnings this quarter were up significantly, 53% and 110% respectively, compared to one year ago. Although net signed contracts of $949.1 million and 1,324 units were down in dollars by 4%, or $43.5 million, and in units by 6%, or 81 units, on a higher community count compared to one year ago, unconsolidated home building joint ventures in which we are a 50% partner signed 34 contracts totaling $75.5 million, compared to 22 contracts totaling $17.7 million in FY 2013's third quarter.
"We are encouraged by our traffic, which was up 13% on a per community basis for the quarter compared to FY 2013. This pattern has continued into August, with traffic up 19% per community versus last August. Meanwhile non-binding deposits were up 18% gross and 4% per community in August, while contracts were down 7% gross and 19% per community. Generally, deposits take two to six weeks to convert to agreements.
"Although we have seen some lessening of pricing power in the past year, we have not felt the need to incentivize to spur home sales. Because we generally do not build 'spec' homes, we are not under pressure to move standing inventory. We are driven by bottom-line growth and are pleased with our continued margin expansion through what we still believe is a recovering, albeit bumpy, housing cycle. We have been particularly pleased with our performance in a number of the markets we have targeted for growth, especially Coastal California, Texas, and the urban New York City area.
"With pent-up demand still yet to be unleashed, we are growing community count in attractive locations. Several recent studies, including one last month in Builder Magazine, have rated our land portfolio highest among the major builders in terms of quality of school districts in which they are located. We believe this is a key factor for many of our buyers in selecting a home. We remain committed to finding the best land in the best locations for the best communities for our clients. We believe this leaves us well-positioned as the market returns to more typical levels of demand and new home production.
"Our Apartment Living division is ramping up. In addition to two completed joint venture communities comprised of 1,450 units, we currently have five joint ventures with more than 1,900 units under construction plus another 2,550 units in the approval pipeline. These communities are primarily in upscale urban and suburban markets where we also have a strong for-sale presence. We are looking to expand our Apartment Living brand, which we believe will broaden our reach in the luxury market, create value and provide another source of cash flow."