Toll Brothers Q2 Profit Tops Estimates, Revenue Up 22%

(RTTNews) - Toll Brothers, Inc. (TOL) reported second-quarter net income of $124.6 million, or $0.73 per share compared to $89.1 million, or $0.51 per share, a year ago. On average, 17 analysts polled by Thomson Reuters expected the company to report profit per share of $0.63, for the quarter. Analysts' estimates typically exclude special items. Pre-tax income was $199.2 million, compared to $140.4 million, prior year.

Second-quarter revenues were $1.36 billion, an increase of 22% from prior fiscal year second quarter. Analysts expected revenue of $1.27 billion, for the quarter. Home building deliveries were 1,638 units, up 26% year-over-year. The average price of homes delivered was $832,400, compared to $855,500, prior year. The company said the drop in the average price of homes delivered was due to mix changes.

Douglas Yearley, Jr., Toll Brothers' CEO, stated: "Solid and improving demand and the financial strength of our affluent buyer base are driving our growth. This was the best spring selling season we have had in over ten years. The number of contracts in fiscal 2017's second quarter was the highest since fiscal 2005's third quarter and the number of contracts per community was the highest since fiscal 2006's second quarter."

Toll Brothers announced the company now estimates it will deliver between 6,950 and 7,450 homes in fiscal 2017, compared to previous guidance of 6,700 to 7,500 units. It believes the average delivered price for 2017 will be between $775 thousand and $825 thousand per home. This translates to projected revenues of between $5.4 billion and $6.1 billion in fiscal 2017. The company reaffirmed its previous guidance for 2017 adjusted gross margin of between 24.8% and 25.3%.

For the third-quarter, the company expects deliveries of between 1,675 and 1,975 units with an average price of between $790 thousand and $815 thousand.

Martin Connor, Toll Brothers' CFO, stated: "Based on our strong results through the first six months, we are revising upward our target of fiscal 2017 return-on-beginning-equity to 12.5% from 12% previously."