We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Toll Brothers (TOL) Stock Gains on Earnings Beat in Q2
Read MoreHide Full Article
Shares of Toll Brothers Inc. (TOL - Free Report) rose 8.71% on May 24 as the homebuilding company reported better-than-expected results in the second quarter of fiscal 2016. The company also raised its top line guidance for 2016.
Shares of the company as well as that of other homebuilders like PulteGroup, Inc. (PHM - Free Report) , D.R. Horton, Inc. (DHI - Free Report) , KB Home (KBH - Free Report) appreciated on May 24 on robust new home sales data for the month of April released the same day.
Toll Brothers’ adjusted earnings of 51 cents per share surpassed the Zacks Consensus Estimate of 48 cents by 6.25%. Adjusted earnings rose 37.8% year over year driven by higher revenues and gross margin.
The company reported revenues of $1.12 billion in fiscal second quarter, surpassing the Zacks Consensus Estimate of $1.08 billion by 3.4%. Revenues also increased 31% year over year driven by higher average selling prices (ASPs) and home deliveries.
Quarter Detail
Toll Brothers offers homes under two segments, namely Traditional Home Building Product and City Living. Traditional Home Building revenues were $1.06 million, up 26.2% year over year, driven by higher ASPs and deliveries. City Living reported revenues of $54 million, up from $16.7 million reported in the prior year quarter.
Consolidated homebuilding deliveries increased 9% year over year to 1,304 units. Deliveries increased 8.2% in the Traditional Home Building segment and around 86% in the City Living division. Average price of homes delivered was $855,500, up 19.9% year over year. The company reported an increase in average prices in all the regions, except West. At the end of fiscal second-quarter 2016, community count stood at 299, up 2.8% year over year.
The number of net orders signed was 1,993 units in fiscal second quarter, up 3% year over year. Value of net orders signed during the quarter was $1.65 billion, up 3% year over year. The number and value of net orders was modest during the quarter owing to a decline in the number of homes signed in the California region due to lack of inventory for sale and increase in prices.
At the end of the reported quarter, Toll Brothers had a backlog of 4,940 homes, up 12.6% year over year. Potential housing revenues from backlog grew 20.4% year over year to $4.19 billion primarily attributable to an increase in average prices of backlog.
Gross margin (excluding write-downs and interest) increased 40 basis points (bps) to 25.7% due to lower expenses and strong revenue. As a percentage of revenues, SG&A expenses declined 110 bps to 11.5%.
Operating margin increased 270 bps year over year to 10.5% due to higher gross margins and improved SG&A ratio.
Fiscal 2016 Outlook
The guidance ranges for total revenue, deliveries and ASPs were raised.
Toll Brothers expects revenues between $4.76 billion and $5.36 billion in fiscal 2016, higher than the prior expectation of $4.6 billion and $5.4 billion.
The home deliveries guidance was tightened to the range of 5,800 and 6,300 homes from the prior expected range of 5,600–6,600. The company expects the average price of homes delivered to be between $820,000 and $850,000 compared with the prior expectation of $810,000 to $850,000.
The company maintained its joint venture and other income guidance between $105 million and $130 million. Gross margin is still expected in the range of 25.8% to 26.2%.
Toll Brothers carries a Zacks Rank #4 (Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Toll Brothers (TOL) Stock Gains on Earnings Beat in Q2
Shares of Toll Brothers Inc. (TOL - Free Report) rose 8.71% on May 24 as the homebuilding company reported better-than-expected results in the second quarter of fiscal 2016. The company also raised its top line guidance for 2016.
Shares of the company as well as that of other homebuilders like PulteGroup, Inc. (PHM - Free Report) , D.R. Horton, Inc. (DHI - Free Report) , KB Home (KBH - Free Report) appreciated on May 24 on robust new home sales data for the month of April released the same day.
Toll Brothers’ adjusted earnings of 51 cents per share surpassed the Zacks Consensus Estimate of 48 cents by 6.25%. Adjusted earnings rose 37.8% year over year driven by higher revenues and gross margin.
TOLL BROTHERS Price and EPS Surprise
TOLL BROTHERS Price and EPS Surprise | TOLL BROTHERS Quote
The company reported revenues of $1.12 billion in fiscal second quarter, surpassing the Zacks Consensus Estimate of $1.08 billion by 3.4%. Revenues also increased 31% year over year driven by higher average selling prices (ASPs) and home deliveries.
Quarter Detail
Toll Brothers offers homes under two segments, namely Traditional Home Building Product and City Living. Traditional Home Building revenues were $1.06 million, up 26.2% year over year, driven by higher ASPs and deliveries. City Living reported revenues of $54 million, up from $16.7 million reported in the prior year quarter.
Consolidated homebuilding deliveries increased 9% year over year to 1,304 units. Deliveries increased 8.2% in the Traditional Home Building segment and around 86% in the City Living division. Average price of homes delivered was $855,500, up 19.9% year over year. The company reported an increase in average prices in all the regions, except West. At the end of fiscal second-quarter 2016, community count stood at 299, up 2.8% year over year.
The number of net orders signed was 1,993 units in fiscal second quarter, up 3% year over year. Value of net orders signed during the quarter was $1.65 billion, up 3% year over year. The number and value of net orders was modest during the quarter owing to a decline in the number of homes signed in the California region due to lack of inventory for sale and increase in prices.
At the end of the reported quarter, Toll Brothers had a backlog of 4,940 homes, up 12.6% year over year. Potential housing revenues from backlog grew 20.4% year over year to $4.19 billion primarily attributable to an increase in average prices of backlog.
Gross margin (excluding write-downs and interest) increased 40 basis points (bps) to 25.7% due to lower expenses and strong revenue.
As a percentage of revenues, SG&A expenses declined 110 bps to 11.5%.
Operating margin increased 270 bps year over year to 10.5% due to higher gross margins and improved SG&A ratio.
Fiscal 2016 Outlook
The guidance ranges for total revenue, deliveries and ASPs were raised.
Toll Brothers expects revenues between $4.76 billion and $5.36 billion in fiscal 2016, higher than the prior expectation of $4.6 billion and $5.4 billion.
The home deliveries guidance was tightened to the range of 5,800 and 6,300 homes from the prior expected range of 5,600–6,600. The company expects the average price of homes delivered to be between $820,000 and $850,000 compared with the prior expectation of $810,000 to $850,000.
The company maintained its joint venture and other income guidance between $105 million and $130 million. Gross margin is still expected in the range of 25.8% to 26.2%.
Toll Brothers carries a Zacks Rank #4 (Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>