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Earnings Jump at Toll Brothers

The company's profit and sales top estimates.
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Toll Brothers

(TOL) - Get Toll Brothers, Inc. Report

had another big quarter as the housing sector remained hot. The company said it expects earnings to grow about 20% in both fiscal 2006 and fiscal 2007, assuming demand remains sound.

The company had third-quarter net income of $215.5 million, or $1.27 a share, vs. $106 million, or 66 cents a share, a year ago. Third-quarter revenue rose to $1.56 billion, up 54% from $1.01 billion last year.

Analysts surveyed by Thomson First Call expected earnings of $1.19 and sales of $1.52 billion in the third quarter.

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Based on its backlog of 9,490 homes, Toll expects to deliver between 2,750 and 2,850 homes in the fourth quarter at an average price of $675,000 to $685,000. The company also said fiscal 2005 earnings per share should rise more than 75% from last year.

The backlog at the end of the third quarter was valued at $6.43 billion.

For fiscal 2006, Toll projected deliveries of 10,200 to 10,600 homes, at an average price of around $665,000, which should translate into homebuilding revenue of $6.78 billion to $7.05 billion.

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"In recent weeks, it appears that bubble mania and reports of a strengthening employment picture with associated interest rate fears have rattled investors," the company said in a press release. "We believe strong job numbers and an improving economy are positive factors for the housing industry, in general, and our luxury niche in particular."