Toll Brothers Inc (NYSE:TOL) posted strong earnings results as its fiscal third-quarter profit more than doubled on the back of higher home prices and deliveries.

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It boiled down to the largest U.S. luxury homebuilder sold more homes at higher prices.

Toll Brothers’ profit doubled

The nation’s leading builder of luxury homes today unveiled results for its third quarter and nine months ended July 31, 2014. Toll Brothers Inc (NYSE:TOL) posted a profit of $97.7 million, or 53 cents a share, up from $46.6 million, or 26 cents a share, a year earlier.

The homebuilder’s pretax income was $151.3 million, up $68.3 million year-over-year. Revenues climbed 53% to $1.06 billion, while analysts polled by Thomson Reuters had expected a per-share profit of 45 cents and revenue of $987.2 million.

Exuding confidence at the company’s strong performance, Toll Brothers Inc (NYSE:TOL)’s chief executive Douglas C. Yearley Jr. said Wednesday that the company was encouraged by traffic, which was up 13% on a per community basis for the quarter compared with a year earlier. Giving further insight into the current quarter, the chief executive said that pattern continued into August, with traffic up 19% per community versus last August.

No incentive to spur home sales

This year proved to be a mixed bag for the housing market, with sales dropping at the beginning of the year amid poor weather and higher interest rates. However, sales have picked up during the summer.

Toll Brothers’ homes can cost over $2 million. It has enjoyed a better performance than other U.S. homebuilders as its affluent customers have been less affected by a rise in mortgage rates over the past year. For instance, the No. 1 U.S. homebuilder D.R. Horton, Inc. (NYSE:DHI), which primarily caters to the needs of first-time buyers, had to shell out discounts to enhance its sales in some markets in the quarter ending June 30.

However, Toll Brothers Inc (NYSE:TOL)’s chief executive said his company hasn’t felt the need to incentivize to spur home sales. He, however, clarified that the homebuyer’s 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.

Moreover, Toll Brothers Inc (NYSE:TOL)’s backlog of $3.1 billion and 4,204 units rose 9% in dollars and 5% in units, compared to FY 2013’s third-quarter-end backlog of $2.8 billion and 4,001 units. Interestingly, at third-quarter end, the average price of homes in backlog was $737,000 compared to $709,000 at FY 2013’s third-quarter end.

Mr. Yearley also cited enhanced performance in several sales markets targeted by company, including coastal California, Texas and New York City.

Ken Heebner’s CGM Fund in its Q2 letter disclosed that on June 30, 2014 CGM Focus Fund held large industry positions in housing and building materials. The fund’s three largest long holdings include Toll Brothers operating in housing and building materials space.