Toll Brothers Inc. Earnings Cheat Sheet: Profits Beat Street

Although Toll Brothers Inc.’s (NYSE:TOL) net income fell in the fourth quarter from a year earlier, profit exceeded analysts’ expectations. 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 Earnings Cheat Sheet for the Fourth Quarter

Results: 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.

Actual vs. Wall St. Expectations: TOL beat the mean analyst estimate of 5 cents per share. Analysts were expecting revenue of $424 million.

Quoting Management: 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.”

Key Stats:

The company beat estimates last quarter after falling short in the previous two quarters. In the third quarter, it missed the mark by one cent, and in the second quarter, it fell short by one cent.

Revenue rose last quarter after seeing a drop the quarter before. Revenue fell 13.2% to $394.3 million in the third quarter from the year earlier.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 4 cents. Over the past three months, the average estimate for the fiscal year has climbed from 18 cents per to share to 20 cents.

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).

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