A Housing and Defense Stock in Active Trading After Earnings

Toll Brothers Inc.’s (NYSE:TOL) net income fell in the fourth quarter from a year earlier, profit exceeded analysts’ expectations.  Net income for Toll Brothers Inc. fell to $15 million (9 cents per share) vs. $50.5 million (30 cents per share) a year earlier. This is a decline of 70% from the year earlier quarter. Revenue rose 6% to $427.8 million from the year earlier quarter. TOL beat the mean analyst estimate of 5 cents per share. Analysts were expecting revenue of $424 million.

Douglas C. Yearley, Jr., Toll Brothers’ chief executive officer, stated: “Against a backdrop of U.S. government gridlock and persistently high unemployment rates at home, political and economic crises around the globe, and dramatic volatility in the capital markets, we produced our second consecutive quarter of pre-tax profitability and our sixth consecutive quarter of pre-tax, pre-impairment profitability. Our pre-impairment home building gross margin improved nearly 250 basis points in FY 2011 compared to FY 2010. Although U.S. housing starts remain down 60 percent from historical norms, we produced solid improvement in most key metrics in FY 2011.”

Competitors to Watch: PulteGroup, Inc. (NYSE:PHM), M.D.C. Holdings, Inc. (NYSE:MDC), D.R. Horton, Inc. (NYSE:DHI), KB Home (NYSE:KBH), Lennar Corporation (NYSE:LEN), Comstock Homebuilding Companies, Inc. (NASDAQ:CHCI), Orleans Homebuilders (OHBIQ), Meritage Homes Corporation (NYSE:MTH), The Ryland Group, Inc. (NYSE:RYL), and Standard Pacific Corp. (NYSE:SPF).

SAIC Inc. (NYSE:SAI) reported its results for the third quarter. Reported a loss of $89 million (27 cents per diluted share) in the quarter. The technical services company had net income of $172 million or 46 cents per share in the year earlier quarter. Revenue was flat at $2.8 billion from the year earlier quarter. SAI reported adjusted net income of 35 cents per share. By that measure, the company beat the mean estimate of 34 cents per share. It beat the average revenue estimate of $2.75 billion.

“Our actions taken in the third quarter in connection with the CityTime situation, including taking the loss provision, were significant and appropriate. During this time, our employees have consistently remained focused on continuing to deliver operational excellence and new capabilities for our customers. Strong new business bookings, generation of cash flow, and other positive milestones this quarter reflect this focus and teamwork,” said Walt Havenstein, SAIC chief executive officer.

Competitors to Watch: OSI Systems, Inc. (NASDAQ:OSIS), General Dynamics Corp. (NYSE:GD), L-3 Communications Hldgs., Inc. (NYSE:LLL), Intl. Business Machines Corp. (NYSE:IBM), American Science & Engineering, Inc. (NASDAQ:ASEI), Northrop Grumman Corp. (NYSE:NOC), Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS), Lockheed Martin Corp. (NYSE:LMT), Computer Sciences Corp. (NYSE:CSC), and Booz Allen Hamilton Holding Corp. (NYSE:BAH).

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