Shares of the U.S. luxury home builder, Toll Brothers, slipped more that 5% on Tuesday after the company reported its first fall in quarterly orders in more than four years.
Corroborating the weak state of the U.S. housing market, the Q4 result of the company is the latest evidence of slowing housing demand, hit by rising interest rates and higher home prices.
After a pre-market fall of 4.2%, the shares further declined to 5.6% after the results indicated that demand would likely fall further in November.
Sales of new U.S. single-family homes plunged to a more than 2-1/2-year low in October, due to sharp declines across regions.
Toll Brothers, whose homes can cost upwards of $2 million, said orders (a key indicator of future revenue) dropped 13.3% to 1,715 units in the quarter ended Oct. 31, against the 6.5% rise expected by analysts.
Orders fell most in California, Toll’s biggest market by revenue. This was the hardest hit where orders in general declined by 39.4% to 226 units in the quarter.
Toll’s net income rose to $311 million, or $2.08 per share, in the quarter, beating analysts’ estimate of $1.83 per share, while revenue surged 21.1% to $2.46 billion against Wall Street’s expectation of $2.35 billion.