Toll Brothers Earnings: TOPS Estimates on Double Digit Revenue Growth

Toll Brothers Inc. (NYSE:TOL) reported net income above Wall Street’s expectations for the third quarter. Toll Brothers designs, builds, markets and arranges financing for single-family detached and attached homes in luxury residential communities.

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Toll Brothers Inc. Earnings Cheat Sheet

Results: Net income for Toll Brothers Inc. rose to $61.6 million (36 cents per share) vs. $42.1 million (25 cents per share) in the same quarter a year earlier. This marks a rise of 46.3% from the year-earlier quarter.

Revenue: Rose 40.6% to $554.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Toll Brothers Inc. beat the mean analyst estimate of 17 cents per share. It beat the average revenue estimate of $382 million.

Quoting Management: Douglas C. Yearley, chief executive officer, stated: “We are enjoying the most sustained demand we’ve experienced in over five years. In the past three quarters, the values of our signed contracts were up 45%, 51% and now 66% compared to FY 2011. Three weeks into our fourth quarter, our non-binding reservation deposits (a precursor to future contracts) are up 59% compared to the same period in FY 2011.

Key Stats:

The company has beaten estiamtes for two quarters in a row. In the second quarter, it topped expectations with net income of 10 cents versus a mean estimate of net income of 4 cents per share.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 16.9% to $373.7 million from the year-earlier quarter.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the fourth quarter has risen to 20 cents per share from 18 cents. For the fiscal year, the average estimate has moved up from 33 cents a share to 43 cents over the last ninety days.

Competitors to Watch: PulteGroup, Inc., M.D.C. Holdings, Inc., D.R. Horton, Inc., KB Home, Lennar Corporation, Comstock Homebuilding Companies, Inc., Orleans Homebuilders, Meritage Homes Corporation, The Ryland Group, Inc., and Standard Pacific Corp.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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