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A contractor moves roofing material on a home under construction at the Toll Brothers Cantera at Gale Ranch housing development in San Ramon, California.
Luxury homebuilder Toll Brothers reported an earnings and revenue beat on Wednesday, helped by strong demand in orders for homes.
Shares spiked more than 6.5 percent to hit a 52-week high.
Toll Brothers reported fiscal first-quarter earnings of 7 cents above estimates at 42 cents a share. Revenue of $920.7 million topped expectations of $887.7 million, but fell from $928.6 million a year ago.
"The pent-up demand of the past seven years may be starting to release, bringing more buyers into the market," Toll Brothers' CEO Douglas Yearley said in a press release on Wednesday.
He noted that millennials were finally beginning to buy houses, while demand from baby boomers remained strong. Yearley also said he believes that home prices could go even higher as supply is still tight. Toll Brothers' homes on average cost $600,000 or more.
Toll Brothers shares 5-day performance
The Pennsylvania-based company said that orders, an indicator of future revenue, rose about 22 percent to 1,522 homes in the first quarter that ended Jan. 31. The firm also increased the low end of its deliveries forecast for the current year to 6,700 to 7,500 units.
The better-than-expected quarterly results follow recent concern that buyers are becoming more reluctant to shell out big bucks for luxury condos in Manhattan.
"Contracts in our City Living division, which operates primarily in the urban metro New York City market, were down year-over-year this quarter," Yearley said in the earnings release.