While Toll Brothers (TOL) caters to the higher end of the home buyer market, it is still worth examining in the greater context of a potential bottoming in housing. The company reported solid numbers this morning but of course the commentary is probably of higher interest – on that end, things seem quite positive as well.
"We are enjoying the most sustained demand we have experienced in over five years," Toll CEO Douglas Yearly said. "The housing recovery is being driven by pent-up demand, very low interest rates and attractively priced homes."
While a volatile sector, the housing stocks have continued to be nice performers over the intermediate term.
- Toll Brothers' net income rose 46 percent in the third quarter as it delivered more homes at higher prices. The Horsham, Pa. company also had lower write-downs during the period. For the three months ended July 31, Toll Brothers Inc. earned $61.6 million, or 36 cents per share. That compares with $42.1 million, or 25 cents per share, a year ago. Analysts polled by FactSet expected earnings of 18 cents per share.
- The current quarter included $3.1 million in inventory write-downs. It recorded write-downs more than five times that large last year.
- Revenue increased to $554.3 million from $394.3 million, up 41 percent. That beat Wall Street's estimate of $515.2 million.
- Toll Brothers said home deliveries climbed 39 percent to 963 units, with the average price of those homes rising to $576,000 from $569,000.
- Backlog increased 44 percent to 2,559 homes, while net signed contracts climbed 57 percent to 1,119 units.
- Toll Brothers anticipates fourth-quarter home deliveries of 800 to 1,000 units at an average price of $570,000 to $590,000 per home. If the company accomplishes that goal, it would have 2012 home sale revenue of $1.71 billion to $1.84 billion and total home deliveries of 3,000 to 3,200 units. In 2011 Toll Brothers had home sale revenue of $1.48 billion and total home deliveries of 2,611 units.
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