TOL Q2 2011 EPS - Toll Brothers Produces Positive Indicators

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Toll Brothers

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TOL Q2 2011 EPS

Toll Brothers (NYSE: TOL) shares were up about 2.3% through late-day trading, after being alone among homebuilders on the positive side in Tuesday’s trade. TOL reported positive data with regard to contract signings, home deliveries and home sales pricing. That forward looking information helped stave off concern about its EPS miss, as the company reported a $0.12 loss per share, against analyst expectations for a $0.04 loss. Based on my experience as an analyst, the operating figure was probably closer to the analysts’ view, especially considering that revenues came in about in line with the analysts’ view. However, the positive indicators were more than enough to support the shares today. Contract signings rose 8%; home deliveries rose 9%; and the average price of newly signed contracts improved 1%. The company also upped its delivery expectations for the year to 2,300 to 2,800, up from the 2,200 it previously said was possible. This verifies much of what we've been writing on the blog regarding our positive outlook for homebuilders this year, despite only marginal growth seen for real estate.

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