Toll Brothers Net Soars on Tax Benefit

Toll Brothers Inc. (NYSE: TOL) reported fourth-quarter and full-year fiscal 2012 results before markets opened this morning. The luxury homebuilder reported quarterly diluted earnings per share (EPS) $2.35 on revenues of $632.8 million. In the same period a year ago, Toll Brothers reported EPS of $0.09 on revenue of $427.8 million. This morning’s results also compare to the Thomson Reuters consensus estimates for EPS of $0.23 and $566.7 million in revenue.

Net income of $411.4 million included a net tax benefit of $350.7 million and write-downs totaling $1.2 million.

For the full fiscal year, Toll Brothers posted EPS of $2.86 on sales of $1.88 billion, compared with consensus estimates for EPS of $0.67 on revenues of $1.82 billion. For the year, the company’s net income of $487.1 million included net tax benefits of $374.2 million and write-downs totaling $17 million.

The company’s CEO said:

Pent-up demand, rising home prices, low interest rates, and improving consumer confidence motivated buyers to return to the housing market in FY 2012. As household formations accelerated and unsold home inventories dropped to record lows, the industry took further steps toward a sustained housing recovery.

The company’s CFO offered the following guidance for FY 2013:

We ended FY 2012 with a backlog of $1.67 billion and 2,569 units, up 70% in dollars and 54% in units, compared to [fiscal year end] 2011. With this backlog and the lowest cancellation rate in our industry, we believe we will deliver between 3,600 and 4,400 homes in FY 2013 at an average price of between $595,000 and $630,000 per home. We expect to end FY 2013 with between 225 and 255 selling communities.

At the end of the 2012 fiscal year, the company claimed 224 selling communities and an average selling price of $582,000. Toll Brothers delivered 3,286 homes in the fiscal year.

Shares are up 4.8% in premarket trading this morning at $34.00, in a 52-week range of $18.95 to $37.08. Thomson Reuters had a consensus analyst price target of around $35.50 before today’s results were announced.

Paul Ausick