Toll Brothers Third Quarter Earnings Sneak Peek

Toll Brothers, Inc. (NYSE:TOL) will unveil its latest earnings on Wednesday, August 22, 2012. Toll Brothers designs, builds, markets and arranges financing for single-family detached and attached homes in luxury residential communities.

Toll Brothers, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 17 cents per share, a rise of 750% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 14 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 17 cents during the last month. For the year, analysts are projecting profit of 45 cents per share, a spike from a loss of 5 cents last year.

Past Earnings Performance: The company topped estimates last quarter after missing forecasts the quarter prior. In the second quarter, it reported net income of 10 cents per share against a mean estimate of profit of 4 cents per share. In the first quarter, it missed forecasts by 5 cents.

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A Look Back: In the second quarter, the company swung to a profit of $16.9 million (10 cents a share) from a loss of $20.8 million (12 cents) a year earlier, beating analyst estimates. Revenue rose 16.9% to $373.7 million from $319.7 million.

Wall St. Revenue Expectations: Analysts are projecting a rise of 29.1% in revenue from the year-earlier quarter to $509 million.

Stock Price Performance: Between June 20, 2012 and August 16, 2012, the stock price had risen $5.91 (22.5%), from $26.25 to $32.16. The stock price saw one of its best stretches over the last year between August 1, 2012 and August 9, 2012, when shares rose for seven straight days, increasing 6.3% (+$1.83) over that span. It saw one of its worst periods between July 26, 2012 and August 1, 2012 when shares fell for five straight days, dropping 5.8% (-$1.77) over that span.

Key Stats:

On the top line, the company is hoping to build on a revenue increase last quarter. Revenue fell 3.6% in the first quarter after increasing in the second quarter.

Analyst Ratings: With six analysts rating the stock as a buy, two rating it as a sell and six rating it as a hold, there are indications of a bullish outlook.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 6.44 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 6.11 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 7.7% to $4.94 billion while liabilities rose by 2.2% to $767 million.

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

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