Toll Brothers Beats, Returns to Profitability

(Toll Brothers earnings report updated with analyst commentary.)

HORSHAM, Pa. (TheStreet) -- Toll Brothers(TOL) posted better-than-expected results for its fiscal fourth quarter, returning to profitability thanks to a hefty tax benefit.

Toll Brothers, a luxury homebuilder, said early Thursday that its net earnings in the recent quarter came to $50.5 million, or 30 cents per share, compared with a year-earlier net loss of $111.4 million, or 68 cents loss per share.

Analysts' consensus call had been for Toll Brothers to book a fourth-quarter loss of $10.2 million, or 8 cents loss per share.

Following the earnings beat and better-than-expected pending home sales data, investors bid Toll Brothers shares 3% higher Thursday.

The builder's surprise profit came as the homebuilder benefited from a $59.9 million tax benefit in the quarter. In the year-earlier quarter, Toll Brothers suffered a tax expense of $4.7 million.

Raymond James analyst William Horne, in an appearance on CNBC, said that while Toll Brothers' report was better than expected, those one-time tax benefits drove the builder's profit. Lack of visibility on future buying activity remains a problem, he added.

Toll Brothers' quarterly revenue decreased by 17.3% to $402.6 million, from $486.6 million, but the top-line figure still managed to top Wall Street's expectations for revenue of $393.8 million.

Homebuilding deliveries of 700 units in the quarter fell 19% year-over-year.

Signed net contracts of $315.3 million and 558 units dropped 27% in both dollars and units compared with Toll Brothers' fiscal fourth quarter of 2009.