David Paul Morris | Bloomberg | Getty Images
Contractors secure a wall section on a home under construction at the Toll Brothers Cantera at Gale Ranch housing development in San Ramon, Calif.
Pennsylvania-based Toll said orders, a key indicator of future revenue, fell 13.3 percent to 1,715 units in the quarter ended Oct. 31, against the 6.5 percent rise expected by analysts.
The housing market has been a weak spot in a robust U.S. economy, with economists blaming the sluggish trend on rising mortgage rates, which have combined with higher house prices, to make home purchase unaffordable for potential buyers.
“In our fourth quarter, despite a healthy economy, we saw a moderation in demand,” Chief Executive Officer Douglas Yearley said.
“In November, we saw the market soften further, which we attribute to the cumulative impact of rising interest rates and the effect on buyer sentiment of well-publicized reports of a housing slowdown.”
The company’s net income rose to $311 million, or $2.08 per share, in the quarter, beating analysts’ estimate of $1.83 per share, according to IBES data from Refinitiv.
Revenue surged 21.1 percent to $2.46 billion, above the Wall Street’s expectation of $2.35 billion.