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Toll Brothers (TOL) to Post Q2 Earnings: What to Expect
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Toll Brothers, Inc. (TOL - Free Report) is scheduled to report second-quarter fiscal 2021 results on May 25, after the closing bell.
In the last reported quarter, the company’s top and bottom lines surpassed the Zacks Consensus Estimate by 18% and 55.1%, respectively. The said metrics also increased 17.4% and 85.4%, respectively, from the prior year on the back of higher deliveries.
Encouragingly, earnings topped analysts’ expectations in 12 of the trailing 13 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for earnings for the quarter to be reported has decreased 2.4% over the past 30 days to 80 cents per share. Nonetheless, the said figure indicates a 35.6% increase from the year-ago earnings of 59 cents per share. The consensus mark for revenues is $1.77 billion, suggesting a 14.3% year-over-year rise.
This luxury homebuilding company is likely to have witnessed impressive growth in the fiscal second quarter, given resilient housing market conditions in the United States. Home sales are expected to have increased from the year-ago level, buoyed by solid U.S. housing market fundamentals. Toll Brothers has been benefiting from resilient housing market conditions backed by historically low mortgage rates, lack of available supply and a highly motivated buyer.
Also, its focus on luxury move-up buyers, who already possess a residence and are looking for a shift to larger and better homes, has been commendable. Toll Brothers has been enjoying greater pricing power than other homebuilding companies as these homebuyers are less sensitive to price changes.
During fiscal first-quarter earnings call, the company highlighted that it expects home deliveries for the quarter to be 2,175 units at an average selling price or ASP of $785,000-$805,000 (suggesting an increase from the year-ago figure of 1,923 homes). ASP in the year ago quarter was $788,500. Management expects community count to be 320 at fiscal second quarter-end.
Toll Brothers — which shares space with Lennar Corporation (LEN - Free Report) , D.R. Horton, Inc. (DHI - Free Report) and PulteGroup, Inc. (PHM - Free Report) in the Zacks Building Products - Home Builders industry — expects adjusted home sales gross margin of 23.4%, implying a rise from 21% recorded in the year-ago period. SG&A expenses, as a percentage of home sales revenues, are projected at 13% (indicating an increase from the year-ago figure of 11.8%).
Meanwhile, higher land, labor and material costs (especially lumber) are expected to have put pressure on fiscal second-quarter margins.
Estimates
The Zacks Consensus Estimate for home sales is pegged at $1,772 million, implying a 17% rise from a year ago. The same for home sales gross margins is pegged at $369 million, indicating a 39% year-over-year increase. The consensus mark for total home sales is 2,311 units, suggesting 20.2% growth from the prior year. The same for average price per units delivered is $796,000, which suggests marginal growth from a year ago.
The consensus estimate for backlogs is pegged at 8,745 units, indicating growth of 36% year over year. The same for average price for these backlogs is pegged at $812,000, implying a 5% decline from the year-ago figure. The consensus estimate for net signed contracts is pegged at 2,500 units. This indicates a 32.6% improvement from the prior-year figure.
What Our Model Indicates
Our proven model does not conclusively predict an earnings beat for Toll Brothers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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Toll Brothers (TOL) to Post Q2 Earnings: What to Expect
Toll Brothers, Inc. (TOL - Free Report) is scheduled to report second-quarter fiscal 2021 results on May 25, after the closing bell.
In the last reported quarter, the company’s top and bottom lines surpassed the Zacks Consensus Estimate by 18% and 55.1%, respectively. The said metrics also increased 17.4% and 85.4%, respectively, from the prior year on the back of higher deliveries.
Encouragingly, earnings topped analysts’ expectations in 12 of the trailing 13 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for earnings for the quarter to be reported has decreased 2.4% over the past 30 days to 80 cents per share. Nonetheless, the said figure indicates a 35.6% increase from the year-ago earnings of 59 cents per share. The consensus mark for revenues is $1.77 billion, suggesting a 14.3% year-over-year rise.
Toll Brothers Inc. Price and EPS Surprise
Toll Brothers Inc. price-eps-surprise | Toll Brothers Inc. Quote
Factors to Note
This luxury homebuilding company is likely to have witnessed impressive growth in the fiscal second quarter, given resilient housing market conditions in the United States. Home sales are expected to have increased from the year-ago level, buoyed by solid U.S. housing market fundamentals. Toll Brothers has been benefiting from resilient housing market conditions backed by historically low mortgage rates, lack of available supply and a highly motivated buyer.
Also, its focus on luxury move-up buyers, who already possess a residence and are looking for a shift to larger and better homes, has been commendable. Toll Brothers has been enjoying greater pricing power than other homebuilding companies as these homebuyers are less sensitive to price changes.
During fiscal first-quarter earnings call, the company highlighted that it expects home deliveries for the quarter to be 2,175 units at an average selling price or ASP of $785,000-$805,000 (suggesting an increase from the year-ago figure of 1,923 homes). ASP in the year ago quarter was $788,500. Management expects community count to be 320 at fiscal second quarter-end.
Toll Brothers — which shares space with Lennar Corporation (LEN - Free Report) , D.R. Horton, Inc. (DHI - Free Report) and PulteGroup, Inc. (PHM - Free Report) in the Zacks Building Products - Home Builders industry — expects adjusted home sales gross margin of 23.4%, implying a rise from 21% recorded in the year-ago period. SG&A expenses, as a percentage of home sales revenues, are projected at 13% (indicating an increase from the year-ago figure of 11.8%).
Meanwhile, higher land, labor and material costs (especially lumber) are expected to have put pressure on fiscal second-quarter margins.
Estimates
The Zacks Consensus Estimate for home sales is pegged at $1,772 million, implying a 17% rise from a year ago. The same for home sales gross margins is pegged at $369 million, indicating a 39% year-over-year increase. The consensus mark for total home sales is 2,311 units, suggesting 20.2% growth from the prior year. The same for average price per units delivered is $796,000, which suggests marginal growth from a year ago.
The consensus estimate for backlogs is pegged at 8,745 units, indicating growth of 36% year over year. The same for average price for these backlogs is pegged at $812,000, implying a 5% decline from the year-ago figure. The consensus estimate for net signed contracts is pegged at 2,500 units. This indicates a 32.6% improvement from the prior-year figure.
What Our Model Indicates
Our proven model does not conclusively predict an earnings beat for Toll Brothers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company has an Earnings ESP of -3.75% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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