Toll Brothers Q4 Profit Misses Estimates; Revenues Up 9%

(RTTNews) - Toll Brothers, Inc. (TOL) reported fourth-quarter net income of $191.9 million, or $1.17 per share, compared to $114.4 million, or $0.67 per share, prior year. On average, 21 analysts polled by Thomson Reuters expected the company to report profit per share of $1.19, for the quarter. Analysts' estimates typically exclude special items. Pre-tax income was $301.7 million, compared to $168.2 million prior year which was negatively impacted by a $121.2 million warranty charge. Adjusted gross margin was 25.3%, for the quarter.

Fourth-quarter revenues were $2.03 billion, up 9% from last year. Analysts expected revenue of $2.08 billion, for the quarter. Home building deliveries were 2,424 units - also up 9%.

Fiscal 2017 net income was $535.5 million, or $3.17 per share, compared to $382.1 million, or $2.18 per share, previous year. Pre-tax income was $814.3 million, compared to $589.0 million in fiscal 2016, which was negatively impacted by $125.6 million in warranty charges. Revenues were $5.82 billion - up 12%; home building deliveries were 7,151 units - up 17%. Adjusted gross margin was 24.8% for the fiscal year.

Douglas Yearley, Jr., Toll Brothers' CEO, said: "Demand has remained healthy across all our demographic segments. We completed fiscal 2017 with our highest annual contracts and revenues in over a decade. Contracts and revenues for the full fiscal year were up 21% and 12%, respectively. Fourth quarter contracts rose 20% in dollars, our fifth quarter in a row of 20%-or-greater growth. We ended fiscal 2017 with a $5 billion backlog, up 27% in dollars and 25% in units from one year ago. This should result in strong revenue and earnings per share growth in fiscal 2018."

For the first-quarter, Toll Brothers expects deliveries of between 1,300 and 1,500 units with an average price of between $820,000 and $840,000. Adjusted gross margin is expected to be approximately 23.3%.

For fiscal 2018, the company expects deliveries of between 7,700 and 8,700 units with an average price of between $810,000 and $860,000. Adjusted gross margin is projected to be between 23.75% and 24.25% of revenues.