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Leading luxury homebuilder Toll Brothers reported a better than expected fourth-quarter earnings Monday. Net deliveries beat expectations with 2,672 units versus the consensus estimate 2,566 units.

Toll Brothers

Toll Brothers Inc NYSE: TOL Reported Earnings After Close Monday

$1.41 Beat $1.30 EPS AND $2.38 Billion Beat $2.19 Billion Revenue Forecast

Earnings

Toll Brothers reported a fourth-quarter earnings of $1.41 per share on revenue of $2.38 billion, exceeding the earnings of $1.30 per share and revenue of $2.19 billion analysts expected, according to Refinitiv.

Toll Brothers Inc NYSE: TOL

Reaction · May 22, Close $40.33 USD −1.06 (-2.57%)

Highlights

Toll Brothers operates under two segments

  1. Traditional Home Building
  2. Urban Infill ("City Living").
  • Home sales revenues were $2.29 billion, down 7%;
  • Home building deliveries were 2,672, down 1%.
  • Net signed contract value was $1.68 billion, up 12%; contract units were 2,031, up 18%.
  • Backlog value at fourth-quarter end was $5.26 billion, down 5%; units in backlog totaled 6,266, up 3%.
  • Home sales gross margin was 18.8%;
  • Adjusted Home Sales Gross Margin, which excludes interest and inventory write-downs (“Adjusted Home Sales Gross Margin”), was 21.9%.
  • SG&A, as a percentage of home sales revenues, was 9.0%. Income from operations was 9.5% of total revenues.
  • Other income, income from unconsolidated entities, and land sales gross profit was $48.4 million.
  • The Company repurchased approximately 1.85 million shares of its common stock during the quarter at an average price of $35.66 per share for an aggregate purchase price of approximately $66.0 million.

Financial Guidance:

  • First quarter deliveries of between 1,650 and 1,850 units with an average price of between $800,000 and $820,000.
  • First quarter Adjusted Home Sales Gross Margin of approximately 21.25%, which is projected to be the low point of the fiscal year.
  • First quarter SG&A, as a percentage of home sales revenues, of approximately 13.5%.
  • First quarter SG&A includes approximately $10 million of G&A expense that is not expected to occur in subsequent quarters of fiscal 2020.
  • First quarter other income, income from unconsolidated entities, and land sales gross profit of approximately $15 million.
  • First quarter tax rate of approximately 26.5%. FYE 2020 community count growth of approximately 10%.

Source: Toll Brothers

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