Ahead Of Toll Brothers' Q4 Results

(RTTNews) - Luxury home builder Toll Brothers Inc. (TOL) believes that slow but steady acceleration experienced by the company and the industry bodes well for the long-term health of the housing market based on increasing household formations, pent-up demand and the current industry-wide production. With its great land positions, well-established brand, broad product and geographic diversification, and solid financial footing, the company is very optimistic about the future.

With an increase in the average price of Toll Brothers' homes in backlog, its growing and profitable presence in California, increased earnings projected from City Living division, and overall solid current demand in most of its markets, the company believes that it has significant room for growth and increased profitability in fiscal year 2016 and beyond.

Last month, the company reported preliminary fourth-quarter revenue of $1.44 billion, 6% higher than the prior year's revenue of $1.35 billion.

Total units for the quarter increased to 1,820 from 1,807 a year ago. Net signed contracts for the fourth quarter is $1.25 billion compared to $970.8 million in the previous year. Total signed units rose 12% to 1,437 units from 1,282 units a year ago.

The company said its full year 2015 recorded a backlog of around $3.50 billion and 4,064 units, in comparison with $2.72 billion and 3,679 units in the same period of last year.

Douglas Yearley, Jr., Toll Brothers' chief executive officer, said, "This is the fifth consecutive quarter of year-over-year growth in contract dollars and units. Based on our strong backlog and pace of demand, we believe we will have significant growth and increased profitability in FY 2016."

Fourth-quarter final results are scheduled to be released before the bell on Tuesday, December 8, 2015. Analysts polled by Thomson Reuters are estimating earnings of $0.84 per share on revenue of $1.44 billion for the fourth quarter. Analysts' estimate typically exclude certain special items.

In The Previous Quarter...

Third quarter net income was $66.7 million or $0.36 per share compared to $97.7 million or $0.53 per share last year. Pre-tax income was $107.5 million versus $151.3 million one year ago. Revenues of $1.03 billion and Home Building deliveries of 1,419 units declined 3% in dollars and 2% in units compared to fiscal year 2014's third quarter totals.

The average price of homes delivered was $724,000 compared to $732,000 in 2014's third quarter. Net signed contracts of $1.23 billion and 1,479 units rose 30% in dollars and 12% in units compared to fiscal year 2014's third quarter.