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Toll Brothers (TOL) Tops Q1 Earnings, Revenues; Keeps View

Toll Brothers, Inc.TOL reported adjusted earnings of 42 cents per share in the first quarter of fiscal 2017, beating the Zacks Consensus Estimate of 35 cents by 20%. Adjusted earnings also improved 5% year over year.

Toll Brothers reported revenues of $920.7 million in the fiscal first quarter, surpassing the Zacks Consensus Estimate of $875 million by nearly 5.2%. Revenues were however down a slight 0.8% year over year.

Shares of this homebuilding company gained nearly 0.6% in yesterday's trading session, following the first-quarter earnings beat.

Quarter Detail

Toll Brothers offers homes under two segments - Traditional Home Building Product and City Living.

Traditional Home Building revenues during the quarter totaled $902.8 million, up 14% year over year. However, City Living reported revenues of $17.9 million were down from $137 million in the prior-year quarter due to a lower number of homes delivered.

Consolidated homebuilding deliveries rose 11.9% year over year to 1,190 units in the first quarter of fiscal 2017. Deliveries increased across all West, North and Mid-Atlantic regions,

barring California and South regions.

Average price of homes delivered was $773,700 in the quarter, down 11.4% year over year.

The number of net orders signed was 1,522 units in the first quarter, up 21.8% year over year. Value of net orders signed during the quarter was $1.24 billion, up 14.4% year over year.

At the end of the fiscal first quarter, Toll Brothers had a backlog of 5,145 homes, up 21% year over year. Potential housing revenues from backlog grew 18.6% year over year to $4.35 billion. The average price of backlog was $844,500 in the first quarter, compared with $861,600 in the prior-year quarter.

The company's homebuilding adjusted gross margin (excluding interest impairments and changes in reserves) decreased 300 basis points (bps) to 23.9% in the quarter.

As a percentage of revenues, SG&A expenses increased to 14.9% compared with 13.1% in the first quarter of fiscal 2016.

Fiscal 2017 Outlook

The company maintained its guidance for fiscal 2017.

The company expects home deliveries between 1,350 units and 1,650 units in the second quarter of fiscal 2017 with an average price of $810,000 to $835,000. For fiscal 2017, home deliveries are now anticipated in the range of 6,700 (6,500 previously) to 7,500 units with an average price of $775,000-$825,000.

Revenues are expected to range between $5.19 billion and $6.19 billion for fiscal 2017, compared to $5.17 billion in fiscal 2016.

Adjusted gross margin in fiscal 2017 is expected in the range of 24.8-25.3% of revenues, reflecting the impact of the Coleman Homes acquisition and changes in product deliveries mix. Second-quarter adjusted gross margin will likely be between 23.8% and 24.2% of revenues.

Second-quarter fiscal 2017 SG&A is expected to be approximately 11.4% of revenues. SG&A, as a percentage of fiscal 2017 revenues, is expected to be approximately 10.6%.

Zacks Rank

Toll Brothers has a Zacks Rank #4 (Sell).

Toll Brothers Inc. Price, Consensus and EPS Surprise

Toll Brothers Inc. Price, Consensus and EPS Surprise | Toll Brothers Inc. Quote

Peer Releases

D.R. Horton, Inc. DHI exhibited an impressive performance in the first quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate. The company reported earnings of 55 cents per share which beat the Zacks Consensus Estimate of 47 cents by 17%. Earnings also increased 31% year over year on higher home sales.

PulteGroup Inc.'s PHMfourth-quarter 2016 adjusted earnings of 67 cents per share beat the Zacks Consensus Estimate of 58 cents by 15.5%. However, quarterly earnings increased 17.5% from the year-ago quarter's adjusted figure of 57 cents. Shares of PulteGroup gained over 2% in pre-market trading .

Lennar Corporation LEN beat expectations on both the counts for the fourth time in a row in the fourth quarter of fiscal 2016 .

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here ..

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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