HORSHAM, PA -- Toll Brothers, Inc., the nation's leading builder of luxury homes, said second-quarter net income was $67.9 million compared to net income of $65.2 million in FY 2014's second quarter. Revenues of $852.6 million and home building deliveries of 1,195 units declined 1% in dollars and 2% in units, compared to FY 2014's second quarter. The average price of homes delivered was $713,000, compared to $706,000 in FY 2014's second quarter.
Net signed contracts of $1.60 billion and 1,931 units rose 25% in dollars and 10% in units, compared to FY 2014's second quarter. The average price of net signed contracts was $826,000, compared to $729,000 in FY 2014's second quarter.
Douglas C. Yearley, Jr., Toll Brothers' chief executive officer, stated: "With strong growth in the value of contracts signed and quarterly year-over-year gross margin improvement we are pleased with the way FY 2015 is unfolding. Second-quarter contracts were up 25% in dollars compared to one year ago. Contracts for the first four weeks of our third quarter were flat due to a lackluster first week. However, we have seen robust improvement in the past three weeks with contracts in units up 29% and deposits (non-binding reservations) up 33%.
"California demand remains very strong. Our communities there accounted for roughly 30% of the value of signed contracts this past quarter as we enjoyed pricing power across both Northern and Southern California. We also saw strength in Texas and New York City, and a number of our other markets.
"Our rental apartment business continues to grow. We are currently leasing up two new communities totaling 685 units - one in downtown Washington, DC and the other in suburban Philadelphia - at faster paces and higher rents than we had projected. We are currently in construction on five other communities totaling 1,833 units stretching from Massachusetts to Maryland and have more than 2,200 additional units in our pipeline.
"As we look to FY 2016, we currently expect gross margin and net income growth based on an increase in the average price of our homes, our growing and profitable presence in California, increased revenues projected from our City Living division, and overall solid current demand in most of our markets."
Robert I. Toll, executive chairman, stated: "The strength of our California communities has exceeded our expectations in both price and pace since we acquired Shapell Homes about fifteen months ago. Many of our other markets have also shown improvement.
"The economy and housing continue on parallel paths of recovery. It appears the housing market is on firm footing and heading in the right direction. As pent-up demand is released, we envision a gradual and elongated recovery for housing."