* Raises lower-end of FY 2017 home sales forecast
* Q1 profit, revenue drop, but beat estimates
* Q1 deliveries rise, but avg prices drop
* CEO says pent-up demand may be starting to release
* Shares rise 7.8 pct to 14-month high (Adds details, background, shares)
Feb 22 (Reuters) - U.S. luxury homebuilder Toll Brothers Inc reported higher-than-expected profit and revenue for the first quarter, helped by strong demand, and the company raised the low end of its deliveries forecast for the year.
An improving job market and attractive mortgage rates has continued to fuel demand for housing in the United States, where homebuilders have also seen a bump in consumer sentiment post-election.
“The pent-up demand of the past seven years may be starting to release, bringing more buyers into the market, especially in the move-up segment, where rising home values are giving buyers more equity when they sell their homes in order to move up,” Executive Chairman Robert Toll said in a statement.
Toll Brothers, whose homes can cost more than $2 million, said it now expects to sell 6,700-7,500 homes in fiscal 2017, compared with its previous forecast of 6,500-7,500 units.
Shares of the company, which also said after markets closed on Tuesday that it would start paying a dividend, rose as much as 7.8 percent to a 14-month high of $34.48 on Wednesday.
The company said orders, which are an indicator of future revenue for homebuilders, rose about 22 percent to 1,522 homes in the first quarter ended Jan. 31.
Toll Brothers said it delivered 1,190 homes in the quarter, about 12 percent more than a year earlier.
But, average selling prices fell 11.4 percent to $773,700 as it rolled out a new line of lower priced homes, T-Select, to cater to millennials who are now entering their thirties and starting families.
The drop in average prices weighed on the Horsham, Pennsylvania-based company’s profit and revenue.
Net earnings declined 3.8 percent to $70.42 million, or 42 cents per share, while revenue slipped 0.8 percent to $920.7 million, the company said. (bit.ly/2lunAFv)
Analysts on average had expected earnings of 35 cents per share on revenue of $902.49 million, according to Thomson Reuters I/B/E/S.
The company said on Tuesday it would start paying a quarterly cash dividend of 8 cents per share.
Toll Brothers’ shares were up 6.1 percent at $33.95. Up to Tuesday’s close, they had risen nearly 23 percent in the past 12 months, compared with a roughly 28 percent increase in the PHLX Housing index. (Reporting by Rachit Vats and Ankit Ajmera in Bengaluru; Editing by Maju Samuel and Savio D‘Souza)