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Category: Toll Brother (TOL)
Date: 27 August 2020 Stock price of Toll Brothers: $45.09 In this article we take a look at the 3rd quarter 2020 earnings report of luxury home builder, Toll Brothers (TOL). Revenued declined by -6.5% and the group reported net income of $247.3 million for the quarter (which is down -36.2% on the net income earned for the same quarter of the previous year.
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We are very pleased with our overall performance in our third quarter, including revenues of $1.63 billion, net income of $114.8 million and backlog of $6.09 billion - Douglas C. Yearley, Jr., chairman and chief executive officer"
More About Toll Brothers (TOL)
Toll Brothers, Inc., A FORTUNE 500 Company, is the nation's leading builder of luxury homes. The Company began business over fifty years ago in 1967 and became a public company in 1986. Its common stock is listed on the New York Stock Exchange under the symbol “TOL.” The Company serves first-time, move-up, empty-nester, active-adult, affordable luxury and secondhome buyers, as well as urban and suburban renters. It operates in 24 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington, as well as in the District of Columbia. Toll Brothers builds an array of luxury residential single-family detached, attached home, master planned resort-style golf, and urban low-, mid-, and high-rise communities, principally on land it develops and improves. The Company acquires and develops rental apartment and commercial properties through Toll Brothers Apartment Living, Toll Brothers Campus Living, and the affiliated Toll Brothers Realty Trust, and develops urban low-, mid-, and high-rise for-sale condominiums through Toll Brothers City Living.
The Company operates its own architectural, engineering, mortgage, title, land development and land sale, golf course development and management, and landscape subsidiaries. Toll Brothers operates its own alarm monitoring company through TBI Smart Home Solutions, a complete home technology division. In addition to providing security monitoring, TBI Smart Home Solutions offers homeowners a full range of low voltage options, allowing buyers to maximize the potential of technology in their new home. The Company also operates its own lumber distribution, house component assembly, and manufacturing operations. Through its Gibraltar Real Estate Capital joint venture, the Company provides builders and developers with land banking, non-recourse debt and equity capital
The Company operates its own architectural, engineering, mortgage, title, land development and land sale, golf course development and management, and landscape subsidiaries. Toll Brothers operates its own alarm monitoring company through TBI Smart Home Solutions, a complete home technology division. In addition to providing security monitoring, TBI Smart Home Solutions offers homeowners a full range of low voltage options, allowing buyers to maximize the potential of technology in their new home. The Company also operates its own lumber distribution, house component assembly, and manufacturing operations. Through its Gibraltar Real Estate Capital joint venture, the Company provides builders and developers with land banking, non-recourse debt and equity capital
Overview of Toll Brothers (TOL) 3Q 2020 earnings report
HORSHAM, PA, August 25, 2020 -- Toll Brothers, Inc. (NYSE:TOL) (www.TollBrothers.com), the nation’s leading builder of luxury homes, today announced results for its third quarter ended July 31, 2020. FY 2020’s
Third Quarter Financial Highlights (Compared to FY 2019’s Third Quarter):
Financial Guidance:
Third Quarter Financial Highlights (Compared to FY 2019’s Third Quarter):
- Net income and earnings per share were $114.8 million and $0.90 per share diluted, compared to net income of $146.3 million and $1.00 per share diluted in FY 2019’s third quarter.
- Pre-tax income was $151.9 million, compared to $186.9 million in FY 2019’s third quarter.
- Home sales revenues were $1.63 billion, down 7%; home building deliveries were 2,022, up 1%.
- Net signed contract homes were 2,833, up 26%; contract value was $2.21 billion, up 18%.
- Backlog in homes at third-quarter end was 7,239, up 6%; backlog value was $6.09 billion, up 4%.
- Home sales gross margin was 19.0%; Adjusted Home Sales Gross Margin, which excludes interest and inventory writedowns (“Adjusted Home Sales Gross Margin”), was 21.9%.
- Pre-tax inventory write-downs totaled $6.7 million.
- SG&A, as a percentage of home sales revenues, was 9.9%. • Income from operations was $149.6 million.
- Other income, income from unconsolidated entities, and land sales gross profit was $3.6 million.
Financial Guidance:
- Fourth quarter deliveries of between 2,400 and 2,550 homes with an average price of between $815,000 and $835,000.
- Fourth quarter Adjusted Home Sales Gross Margin of approximately 21.5%.
- Fourth quarter SG&A, as a percentage of home sales revenues, of approximately 9.0%.
- Fourth quarter other income, income from unconsolidated entities, and land sales gross profit of approximately $5 million.
- Fourth quarter tax rate of approximately 26.0%.
- Community count at FYE 2020 of approximately 320 communities.
- Community count growth of at least 10% from FYE 2020 to FYE 2021.
Toll Brothers (TOL) management commentary on their 3Q 2020 earnings report
Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are very pleased with our overall performance in our third quarter, including revenues of $1.63 billion, net income of $114.8 million and backlog of $6.09 billion. Our adjusted gross margin of 21.9% in the quarter improved sequentially compared to 21.0% in the fiscal 2020 second quarter due to a shift in mix of deliveries and solid execution by our teams in the field. SG&A as a percentage of home sales revenue improved to 9.9% in the quarter from 10.6% in the prior year period, reflecting cost efficiencies initiated in our second quarter. “Our third quarter net signed contracts were our highest third quarter ever in both units and dollars, and our contracts per community, at 8.5, were the highest third quarter in fifteen years. This strength has continued into August.
We attribute the surge in demand to a number of factors, including historically low interest rates, a continued undersupply of homes, and consumers focused more than ever on the importance of home. “With our well-located land holdings in twenty-four states and our strategic focus on expanding our geographic footprint, product lines and price points, we are well-positioned to take advantage of the resurgent housing market.”
We attribute the surge in demand to a number of factors, including historically low interest rates, a continued undersupply of homes, and consumers focused more than ever on the importance of home. “With our well-located land holdings in twenty-four states and our strategic focus on expanding our geographic footprint, product lines and price points, we are well-positioned to take advantage of the resurgent housing market.”
Toll Brothers (TOL) stock price history over the last 5 years
The image below shows the stock price history of Toll Brothers (TOL) over the last 5 years. And its been a ok good time for TOL stockholders with the stock of Toll increasing by 22.8% over the last 5 years.
The stock of Toll Brothers (TOL) is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Toll Brothers stock is very positive at this point in time.
The stock of Toll Brothers (TOL) is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of Toll Brothers stock is very positive at this point in time.
Toll Brothers (TOL) stock vs KB Home (KBH) stock over the last 5 years
The image below shows the stock price history of Toll Brothers (TOL) and KB Home (KBH) over the last 5 years. While the stock price trends look fairly similar the actual returns provided by these two stocks are vastly different.
The stock of KB Home (KBH) has easily outperformed that of Toll Brothers over the last 5 years.
- KB Home: 158.7%
- Toll Brothers: 26.7%
The stock of KB Home (KBH) has easily outperformed that of Toll Brothers over the last 5 years.
Next earnings release of Toll Brothers (TOL)
It is expected that Toll Brothers will release their 4th quarter and full 2020 earnings report in late November 2020
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