TOL Toll Brothers Inc

Toll Brothers Inc. on Tuesday again reported double-digit revenue growth in its latest quarter and projected continuing strong performance in 2017 as the home builder lures millennial buyers.

Chief Executive Douglas Yearley Jr. said in prepared remarks that about 22% of the company's settlements included one primary buyer who is 35 or younger. Many are snatching up urban condos and rental apartment properties, as well as Toll Brother's core suburban homes.

"With the millennial generation now entering their thirties and forming families, we are starting to benefit from the desire for home ownership from the affluent leading edge of this huge demographic wave," Mr. Yearley said.

Results in the fourth quarter were broad-based across the country, with every region showing contract growth for its traditional home building business.

However, the company reported fewer contracts for its City Living division, which builds urban apartments. Revenue in the segment decreased sharply to $13.9 million from $131.1 million in the year-ago period. The average price per unit jumped to $2.3 million from $1.7 million.

As a luxury home builder, Toll Brothers has faced concerns about exposure to high-end markets that are softening, including New York City. The company on Tuesday gave a rosy outlook for performance in its current year, with Mr. Yearley noting "positive demand trends in many regions."

Over all for the October quarter, Toll posted a profit of $114.4 million, or 67 cents a share, down from $147.2 million, or 80 cents a share, a year prior.

The results included a $121.2 million warranty charge primarily related to older stucco homes in the Mid-Atlantic region.

Revenue rose 29% to $1.86 billion.

The company delivered 2,224 units in the quarter, an increase of 22% over the year-earlier period. Toll Brothers ended the year with a backlog of $3.98 billion, up 14% from a year ago.

National home prices reached a record high in September, according to the latest reading by the S&P CoreLogic Case-Shiller index. But home building remains far below historical levels typically associated with recovering markets.

Shares of Toll Brothers, which have declined 1.6% over the past three months, were inactive premarket.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

December 06, 2016 07:45 ET (12:45 GMT)

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