Toll Brothers Expects Growth In Revenues, Earnings In FY17; Q4 Revenue Up 29%

(RTTNews) - Toll Brothers, Inc. (TOL), the nation's leading builder of luxury homes, announced the company expects first-quarter deliveries of between 1,000 and 1,250 units with an average price of between $750,000 and $780,000. Toll Brothers expects fiscal 2017 deliveries of between 6,500 and 7,500 units with an average price of between $775,000 and $825,000. The company expects its full fiscal 2017 adjusted gross margin to be between 24.8% and 25.3% of revenues reflecting the impact from Coleman Homes and other changes in mix of product deliveries.

Douglas Yearley, Jr., Toll Brothers' CEO, stated: "With our strong fourth quarter operating performance, double digit increase in year-end backlog, and positive sales trends to jump start our new fiscal year, we see growth in revenues and earnings and an improvement in return on equity in FY 2017."

Martin Connor, Toll Brothers' CFO, stated "We expect the combination of purchase accounting and lower gross margin from our Coleman Homes acquisition to reduce our overall Adjusted Gross Margin by 30 to 40 basis points in FY 2017. We also expect changes in our mix of product deliveries to negatively impact Adjusted Gross Margin in FY 2017 by 25 to 35 basis points in FY 2017. We expect to deliver one of the highest Adjusted Gross Margins in the industry in FY 2017 while improving our return on equity to above 12% and growing earnings per share significantly."

Fourth-quarter net income was $114.4 million, or $0.67 per share, compared to $147.2 million, or $0.80 per share, prior year. On Average, 14 analysts polled by Thomson Reuters expected the company to report profit per share of $0.99, for the quarter. Analysts' estimates typically exclude special items.

The company noted that the quarter's results included a $121.2 million warranty charge primarily related to older stucco homes in the Mid-Atlantic region. Adjusting for items, fourth-quarter adjusted pre-tax income was $291.8 million, compared to $236.7 million, prior year. Fourth-quarter Adjusted Gross Margin, which excludes interest and inventory write-downs, further adjusted for the warranty charge, was 24.9%, compared to 27.0%, prior year.

Fourth-quarter total revenues were $1.86 billion compared to $1.44 billion, a year ago. Analysts expected revenue of $1.79 billion, for the quarter. Fourth-quarter home building deliveries were 2,224 units, up 22% in units, compared to prior year's fourth-quarter total of 1,820 units. The average price of homes delivered was $834,000, compared to $790,000 prior year.