Toll Brothers (TOL) Reports Improved Q2 Results as Housing Continues Stalemate
Tweet
Share
E-mail
Get Alerts TOL Hot Sheet
Price: $147.31 +1.51%
Financial Fact:
Net income (loss): 105.48M
Today's EPS Names:
BTTX, VAXX, ELYS, More
Financial Fact:
Net income (loss): 105.48M
Today's EPS Names:
BTTX, VAXX, ELYS, More
Join SI Premium – FREE
Toll Brothers Inc. (NYSE: TOL) shares have jumped about 5 percent Wednesday morning following second-quarter results from the Horsham, PA-based homebuilder.
Net loss in the quarter was nearly halved from $40.4 million during the same quarter last year to $20.77 million, or 12 cents per diluted share. Excluding write-downs and joint venture impairments, net income in the quarter was about $1 million.
Revenue in the quarter edged up about 2.7 percent to $319.68 million.
Analysts on the Street were looking for a more modest loss of 4 cents per share on sales of $319.6 million.
Other metrics from the second quarter: Home building deliveries increased 9 percent to 591, net signed contracts increased 7 percent to 879, contract cancellation rate fell to 3.9 percent, and overall backlog increased 1 percent.
"Our target customers generally have remained employed during this downturn, and, with their solid credit profiles, been able to secure mortgages at good rates. However, many have deferred their home buying decisions because of concerns over the direction of the economy and media headlines suggesting that home prices continue to decline," CEO Douglas Yearly commented. "We believe that some of our clients, after waiting so long, are starting to move off the fence and into the market, motivated by attractive pricing, low interest rates and, most importantly, the desire to take the next step in their lives."
Looking ahead, Toll Bros. sees delivery of 2,300 to 2,800 homes in 2011, with an average delivered price over the next two quarters of $540K to $560K per home.
Commenting on the quarter, Ticonderoga said a recurring theme is solid order growth coupled with a "stuck in Neutral" cost profile and persistent impairment charges. "The slow bleed on the income statement and its effect on book value is something that likely gets rationalized by the Street, thanks to the consistently improving Order rates. However, we believe the current valuation is generous given the lack of legitimate, consistent, profit potential at the operating level."
The firm maintains a Neutral rating on Toll Bros.
Net loss in the quarter was nearly halved from $40.4 million during the same quarter last year to $20.77 million, or 12 cents per diluted share. Excluding write-downs and joint venture impairments, net income in the quarter was about $1 million.
Revenue in the quarter edged up about 2.7 percent to $319.68 million.
Analysts on the Street were looking for a more modest loss of 4 cents per share on sales of $319.6 million.
Other metrics from the second quarter: Home building deliveries increased 9 percent to 591, net signed contracts increased 7 percent to 879, contract cancellation rate fell to 3.9 percent, and overall backlog increased 1 percent.
"Our target customers generally have remained employed during this downturn, and, with their solid credit profiles, been able to secure mortgages at good rates. However, many have deferred their home buying decisions because of concerns over the direction of the economy and media headlines suggesting that home prices continue to decline," CEO Douglas Yearly commented. "We believe that some of our clients, after waiting so long, are starting to move off the fence and into the market, motivated by attractive pricing, low interest rates and, most importantly, the desire to take the next step in their lives."
Looking ahead, Toll Bros. sees delivery of 2,300 to 2,800 homes in 2011, with an average delivered price over the next two quarters of $540K to $560K per home.
Commenting on the quarter, Ticonderoga said a recurring theme is solid order growth coupled with a "stuck in Neutral" cost profile and persistent impairment charges. "The slow bleed on the income statement and its effect on book value is something that likely gets rationalized by the Street, thanks to the consistently improving Order rates. However, we believe the current valuation is generous given the lack of legitimate, consistent, profit potential at the operating level."
The firm maintains a Neutral rating on Toll Bros.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Toll Bros. (TOL) PT Raised to $170 at Truist Securities
- Toll Brothers Announces Model Home Grand Opening at Franklin Ridge Community in Franklin, Tennessee
- Toll Bros. (TOL) PT Raised to $195 at UBS on Stronger Margin Expectations
Create E-mail Alert Related Categories
Corporate News, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
