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.
Here's What to Expect From Toll Brothers' (TOL) Q3 Earnings
Read MoreHide Full Article
Toll Brothers, Inc. (TOL - Free Report) is scheduled to report third-quarter fiscal 2021 results on Aug 24, after the closing bell.
In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 26.3% and 9%, respectively. The said metrics also increased 71.2% and 24.6%, respectively, from the prior year on the back of higher deliveries.
Encouragingly, earnings topped analysts’ expectations in 13 of the trailing 14 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for fiscal third-quarter earnings has been unchanged over the past 30 days to $1.52 per share. The said figure indicates a 68.9% increase from the year-ago earnings of 90 cents per share. The consensus mark for revenues is $2.22 billion, suggesting a 34.2% year-over-year rise.
This luxury homebuilding company is likely to have witnessed impressive growth in the fiscal third quarter, given resilient housing market conditions in the United States. Home sales are expected to have increased from the year-ago level, buoyed by solid U.S. housing market fundamentals. Toll Brothers has been benefiting from resilient housing market conditions backed by historically low mortgage rates, lack of available supply and a highly motivated buyer.
Also, its focus on luxury move-up buyers — who already possess a residence and are looking for a shift to larger and better homes — has been commendable. Toll Brothers has been enjoying greater pricing power than other homebuilding companies as these homebuyers are less sensitive to price changes.
During fiscal second-quarter earnings call, the company highlighted that it expects home deliveries for the quarter to be 2,675 units (suggesting an increase from the year-ago figure of 2,022 homes) at an average selling price or ASP of $820,000-$840,000. ASP in the year ago quarter was $805,000. Management expects community count to be 310 at fiscal third quarter-end.
Toll Brothers expects adjusted home sales gross margin of 24.8%, implying a rise from 21.9% recorded in the year-ago period. SG&A expenses, as a percentage of home sales revenues, are projected at 11.6% (indicating an increase from the year-ago figure of 9.9%).
Meanwhile, higher land, labor and raw material costs (especially lumber) are expected to have put pressure on fiscal third-quarter margins.
Estimates
The Zacks Consensus Estimate for backlogs is pegged at 10,118 units, indicating growth of 39.8% year over year. The same for average price for these backlogs is pegged at $815,000, implying a 3.1% decline from the year-ago figure. The consensus estimate for net signed contracts is pegged at 2,691 units. This indicates a 5% decline from the prior-year figure.
What Our Model Indicates
Our proven model does not conclusively predict an earnings beat for Toll Brothers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
M.D.C. Holdings, Inc. — which currently holds a Zacks Rank #3 — reported impressive second-quarter 2021 results. Both the top and bottom lines topped their respective Zacks Consensus Estimate as well as rose strongly on a year-over-year basis. The upside was mainly driven by robust housing market fundamentals and solid execution despite industry challenges.
Meritage Homes Corporation’s (MTH - Free Report) — also a Zacks Rank #3 company — reported second-quarter 2021 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Also, the top and bottom lines improved significantly on a year-over-year basis. Total revenues and earnings topped the Zacks Consensus Estimate for the 11th straight quarter.
PulteGroup Inc. (PHM - Free Report) — currently carrying a Zacks Rank #3 — reported second-quarter 2021 results, wherein earnings met the Zacks Consensus Estimate but revenues missed the same. Nonetheless, both earnings and revenues grew year over year, buoyed by solid housing market momentum as well as limited inventory of new and existing homes.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's What to Expect From Toll Brothers' (TOL) Q3 Earnings
Toll Brothers, Inc. (TOL - Free Report) is scheduled to report third-quarter fiscal 2021 results on Aug 24, after the closing bell.
In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 26.3% and 9%, respectively. The said metrics also increased 71.2% and 24.6%, respectively, from the prior year on the back of higher deliveries.
Encouragingly, earnings topped analysts’ expectations in 13 of the trailing 14 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for fiscal third-quarter earnings has been unchanged over the past 30 days to $1.52 per share. The said figure indicates a 68.9% increase from the year-ago earnings of 90 cents per share. The consensus mark for revenues is $2.22 billion, suggesting a 34.2% year-over-year rise.
Toll Brothers Inc. Price and EPS Surprise
Toll Brothers Inc. price-eps-surprise | Toll Brothers Inc. Quote
Factors to Note
This luxury homebuilding company is likely to have witnessed impressive growth in the fiscal third quarter, given resilient housing market conditions in the United States. Home sales are expected to have increased from the year-ago level, buoyed by solid U.S. housing market fundamentals. Toll Brothers has been benefiting from resilient housing market conditions backed by historically low mortgage rates, lack of available supply and a highly motivated buyer.
Also, its focus on luxury move-up buyers — who already possess a residence and are looking for a shift to larger and better homes — has been commendable. Toll Brothers has been enjoying greater pricing power than other homebuilding companies as these homebuyers are less sensitive to price changes.
During fiscal second-quarter earnings call, the company highlighted that it expects home deliveries for the quarter to be 2,675 units (suggesting an increase from the year-ago figure of 2,022 homes) at an average selling price or ASP of $820,000-$840,000. ASP in the year ago quarter was $805,000. Management expects community count to be 310 at fiscal third quarter-end.
Toll Brothers expects adjusted home sales gross margin of 24.8%, implying a rise from 21.9% recorded in the year-ago period. SG&A expenses, as a percentage of home sales revenues, are projected at 11.6% (indicating an increase from the year-ago figure of 9.9%).
Meanwhile, higher land, labor and raw material costs (especially lumber) are expected to have put pressure on fiscal third-quarter margins.
Estimates
The Zacks Consensus Estimate for backlogs is pegged at 10,118 units, indicating growth of 39.8% year over year. The same for average price for these backlogs is pegged at $815,000, implying a 3.1% decline from the year-ago figure. The consensus estimate for net signed contracts is pegged at 2,691 units. This indicates a 5% decline from the prior-year figure.
What Our Model Indicates
Our proven model does not conclusively predict an earnings beat for Toll Brothers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company has an Earnings ESP of -1.32% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
M.D.C. Holdings, Inc. — which currently holds a Zacks Rank #3 — reported impressive second-quarter 2021 results. Both the top and bottom lines topped their respective Zacks Consensus Estimate as well as rose strongly on a year-over-year basis. The upside was mainly driven by robust housing market fundamentals and solid execution despite industry challenges.
Meritage Homes Corporation’s (MTH - Free Report) — also a Zacks Rank #3 company — reported second-quarter 2021 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Also, the top and bottom lines improved significantly on a year-over-year basis. Total revenues and earnings topped the Zacks Consensus Estimate for the 11th straight quarter.
PulteGroup Inc. (PHM - Free Report) — currently carrying a Zacks Rank #3 — reported second-quarter 2021 results, wherein earnings met the Zacks Consensus Estimate but revenues missed the same. Nonetheless, both earnings and revenues grew year over year, buoyed by solid housing market momentum as well as limited inventory of new and existing homes.