Toll Brothers Q4 Profit Surges, Revenue Tops View

(RTTNews) - Luxury home builder Toll Brothers, Inc. (TOL) Wednesday said its fourth-quarter profit increased significantly from the prior year, supported by higher revenues that topped estimates. Home building deliveries and average price also increased from the previous year.

Net income jumped to $131.5 million, or $0.71 per share, from $94.9 million, or $0.54 per share, in the year-ago quarter. On average, twenty-one analysts polled by Thomson-Reuters were looking for earnings of $0.73. Analysts' estimates typically exclude one-time items.

Pre-tax income rose to $188.5 million from $150.2 million, and included inventory write-downs of $10.8 million as well as a $32 million increase in reserves for warranty and litigation in cost of sales.

Last year's results included pre-tax write-downs of $2.5 million and an insurance accrual reversal of $4.8 million.

Revenues climbed to $1.35 billion from $1.04 billion, and came in above Wall Street expectation of $1.34 billion.

Home building deliveries were 1,807 units, an increase of 22 percent from last year. The average price of homes delivered was $747,000, compared to $703,000 in the prior year period.

Net signed contracts increased 16 percent to $970.8 million and climbed 10 percent to 1,282 units. The average price of net signed contracts improved to $757,000 from $721,000.

The company ended 2014 with 263 selling communities, compared to 232 at the end of 2013. Toll Brothers expects to end fiscal year 2015 with 270 to 310 selling communities.

The builder expects to deliver between 5,000 and 6,000 homes in fiscal 2015 at an average price of $710,000 to $760,000 per home. If the improvement in demand seen since August continues, the higher end of that range is more achievable.

Martin Connor, CFO, said, "Looking to FY 2016, we are optimistic. With agreement volume up 16% year to date in FY 2015, continued community count growth and model openings planned in key California and Texas communities, we are looking forward to improving core homebuilding deliveries and operating margins in FY 2016."

TOL closed up 0.6 percent on Tuesday at $34.79.