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Huge Beat for Toll Brothers

Earnings are 22 cents above per-share estimates.
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The real-estate bubble argument will get another airing Thursday after

Toll Brothers

(TOL) - Get Report

reported second-quarter earnings that eclipsed Wall Street estimates by a double-digit percentage.

Homebuilder-to-the-rich Toll reported earnings that rose 134% from a year ago to $170.1 million, or $2.01 a share, on a 52% jump in sales to $1.25 billion. Analysts had been expecting earnings of $1.79 a share on sales of $1.26 billion.

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Toll Brothers has made a habit of big earnings beats of late. Its actual earnings were 15% above Wall Street estimates in the first quarter, 12% above estimates in the fourth quarter, and 10% above estimates in the third quarter, according to Thomson First Call.

Reflecting that outperformance and the strength of U.S. real estate, the stock is up about 25% this year and has more than doubled since the start of 2004.

Analysts currently expect the company to earn $8.09 a share in the year ending in October, with the range of 16 estimates going from $7.70 to $8.73. In its release Thursday, Toll guided its own estimate for full-year growth higher to 70% from 60%, or $8.57 a share.

Underpinning the guidance is the company's strong backlog. Toll said it signed $2.2 billion worth of contracts in the period, up from $1.6 billion a year ago, and ended the quarter with a record backlog of 8,561 homes.

The stock added $2.27, or 2.7%, in premarket trading to $88. The price is 10.3 times the new guidance.