Toll Brothers Inc. (TOL), a builder of luxury homes, on Tuesday said the number and value of contracts signed in its fiscal second quarter rose sharply as demand surged throughout most of the United States.

The number of contracts rose 23 percent, and higher home prices pushed up the value of the contracts 38 percent, but the company's stock slid 2.5 percent in afternoon trading as closings came in slightly weaker than expected.

Toll's home-building revenue during the quarter rose 51 percent to $1.23 billion, as Toll closed on 1,912 homes, up 31 percent but 13 homes short of the low-end of the company's forecast. Closings usually occur about a year after contracts are signed.

Robert Toll, chairman and chief executive, attributed the shortfall to weather-related construction delays in Arizona; Las Vegas and Reno, Nevada; the Washington D.C. metro area and New England. An electrical utility strike in New Jersey and difficulty getting inspectors in some communities there also affected closings, he said.

"The homes that should have settled in the second quarter will settle in the third quarter," Toll said during a conference call with analysts.

Heavy rains in the western United States in March delayed construction for several home builders who already have reported quarterly earnings.

"Why would anyone care about a few homes slipping because of the weather?" JMP Securities analyst James Wilson said. "But the market forgets very quickly."

The Dow Jones U.S. Home Construction Index, a wide barometer of home-building stock activity, was down 1.7 percent.

The Horsham, Pennsylvania-based company has benefited from continued strong demand for high-end homes, as well as from low mortgage rates and its ability to control land in markets where land approved for building is scarce.

The number of contracts for Toll rose in every region except the West Coast, where the company's developments sold out.

The company ended the quarter with a backlog of $5.9 billion worth of homes under contract and awaiting construction. The backlog stretches into homes that are expected to close in the second quarter fiscal 2006.

The average home price rose to $693,000 from $616,600 a year ago.

Toll Brothers (search) said it was on track to deliver 60 percent net income growth for fiscal 2005 and 20 percent growth in 2006. The company maintained its prior forecast that it will deliver between 8,050 and 8,400 homes in 2005.

Our backlog now extends about 11 months on average, providing revenue visibility into the second quarter of fiscal 2006," Chief Executive Robert Toll said in a statement.

The company said it now controls about 68,000 lots, up from 58,000 a year ago.

Toll said the decline on the West Coast, in particular California, was due to a lack of supplies rather than demand, and it believes it will increase its California community count in the coming year.

Analysts expect Toll to earn $8.10 a share in its 2005 fiscal year and $9.48 a share in 2006, according to Reuters Estimates. It earned $5.04 a share in 2004.

Toll's shares were down $2.03 at $79.26 on the New York Stock Exchange.