Shares of Toll Brothers Inc. (NYSE:TOL) on Tuesday gained 8.8% to almost $31.91 on heavy volume after the company reported a profit of $105.5 million, or $0.61 cents per share, for its fiscal third quarter ended July 31. The gain, which matched analyst expectations, compared with a profit of $66.7 million, or $0.36 per share, in the prior year quarter.
Volume exceeded 15 million shares traded by late-day Tuesday. Normal volume is roughly a seventh of that.
The stock also was boosted by a strong report on new-home sales in July from the Commerce Department Tuesday morning.
A replay of the company's Tuesday earnings conference call with analysts can be accessed here.
Here's the earnings report:
Pre-tax income of $163.7 million was up 52% from $107.5 million in last year's quarter. The results included impairments of $3.7 million, compared to impairments of $18.0 million for the same period last year.
Revenue of $1.27 billion and home-building deliveries of 1,507 units rose 24% in dollars and 6% in units, compared to last year's third quarter. The average price of homes delivered was $843,000, up from $724,000 in 2015’s quarter.
Net signed contracts of $1.45 billion and 1,748 units rose 18% in dollars and units. The average price of net signed contracts was $831,000 compared to $834,000.
Backlog of $4.37 billion and 5,181 units rose 19% in dollars and 17% in units. At third-quarter end, the average price of homes in backlog was $844,000, compared to $829,000 at 2015’s third-quarter end.
Gross margin, as a percentage of revenues, was 21.9%, up from 19.8% in last year's quarter. Adjusted gross margin, which excludes interest and inventory write-downs, as a percentage of revenues, was 25.3%, compared to 25.2%.
SG&A, as a percentage of revenue, was 10.6%, compared to 11.3% in FY 2015’s third quarter.
Toll ended its third quarter with 297 selling communities, compared to 299 at second-quarter end and 267 at 2015’s third-quarter end. The company expects to end FY 2016 with between 305 and 315 selling communities.
Lot count at quarter's end was approximately 48,700 lots owned and optioned, compared to approximately 45,400 one quarter earlier and 45,400 a year ago.
The Company ended its FY 2016 third quarter with $351.9 million of cash and marketable securities, compared to $423.2 million at 2016’s second-quarter end and $404.8 million at FY 2015’s third-quarter end.
Toll said it expects fourth-quarter deliveries of between 2,025 and 2,325 units with an average price of between $815,000 and $835,000. This range results in projected full-fiscal-year 2016 deliveries of between 5,900 and 6,200 units with an average delivered price of between $840,000 and $850,000. This would result in revenues of between $4.96 billion and $5.27 billion, up approximately 19% to 26% over FY 2015.
“We are particularly pleased with this quarter’s 18% growth in contracts, in both dollars and units," said Douglas C. Yearley, Jr., Toll Brothers’ CEO. "And, through the first three weeks of August, the beginning of our fourth quarter, our non-binding reservation deposits are up 23%, compared to one year ago."