Toll Brothers Posts Upbeat Q2 Earnings, But Revenue Drops

Toll Brothers Inc TOL reported better-than-expected earnings for the second quarter. The Horsham, Pennsylvania-based company posted quarterly net income of $67.9 million, or $0.37 per share, compared to $65.2 million, or $0.35 per share, in the year-ago period. Its total revenue slipped to $852 million from $860 million. However, analysts were expecting earnings of $0.35 per share on revenue of $861.15 million. The average estimate among 14 Estimize users was for earnings of $0.38 per share and revenue of $870.97 million. Home building deliveries declined 2 percent in units to 1,195 units, while the average price of homes delivered increased 1 percent to $713,000. Net signed contracts climbed 10 percent in units to 1,931 units. Backlog climbed 9 percent in dollars to $3.48 billion, while backlog in units gained 1 percent to 4,387 units, versus the FY14's second-quarter-end. Its gross margin, excluding interest and write-downs, widened to 25.3 percent, from 23.7 percent in the year-ago quarter. Toll Brothers ended the quarter with 269 selling communities, compared to 252 at the end of year-ago quarter. Robert I. Toll, executive chairman, stated, "The strength of our California communities has exceeded our expectations in both price and pace since we acquired Shapell Homes about fifteen months ago. Many of our other markets have also shown improvement." "The economy and housing continue on parallel paths of recovery. It appears the housing market is on firm footing and heading in the right direction. As pent-up demand is released, we envision a gradual and elongated recovery for housing," the executive added. Toll Brothers shares gained 1.35 percent to $37.49 in pre-market trading.