Forbes Earnings Preview: Toll Brothers

By Narrative Science

After Toll Brothers (TOL) took a loss of 6 cents a year ago, analysts think when the company reports this year's second quarter numbers on Wednesday, May 23, 2012, the results will be a lot better. Analysts are expecting profit of 4 cents a share.

What to Expect:

Over the past month, the consensus estimate has risen from 3 cents, but it's the same as the estimate from three months ago. For the fiscal year, analysts are expecting earnings of 34 cents per share.

Revenue is projected to be 18.6% above the year-earlier total of $319.7 million at $379.3 million for the quarter. For the year, revenue is projected to roll in at $1.73 billion.

Trends to Watch For:

Toll Brothers' loss in the most recent quarter came after two previous quarters of profitability. The company reported a loss of $2.8 million in the first quarter and a profit of $15 million in the fourth quarter of the last fiscal year and profit of $42.1 million in the third quarter of the last fiscal year.

Over the last four quarters, revenue has fallen an average of 2% year-over-year. The biggest drop came in the third quarter of the last fiscal year, when revenue fell 13.2% from the year-earlier quarter.

Analyst Ratings:

The majority of analysts (60%) rate Toll Brothers as a buy. This compares favorably to the analyst ratings of its nearest 10 competitors, which average 35.4% buys. Wall Street has warmed to the stock over the past three months, with the average analyst estimate increasing to moderate buy from hold. Last quarter, four of 15 rated it a buy and one rated it a sell.

Competitors:

Toll Brothers is engaged in the design and construction of single-family detached and attached luxury homes. It also arranges financing for these homes. One of Toll Brothers' main competitors in the household durables industry is Lennar (LEN). Other competitors in the consumer discretionary sector include: PulteGroup (PHM), MDC Holdings (MDC), and D.R. Horton (DHI).

Recent Price Movement:

Over the past quarter, the stock price has increased from $23.70 on February 21, 2012 to $25.96.

Earnings estimates provided by Zacks.

Narrative Science, through its proprietary artificial intelligence platform, transforms data into stories and insights.

Since 1917, Forbes has stood, unwavering, for one overriding principle: the unshakable belief in the power of free enterprise. Our mission has also been clear and unchanging: to provide insights and information that ensure the success of those who tap into Forbes.

More from Investing

10 Stocks Goldman Sachs Thinks Will Crush the S&P 500's Performance in 2019

10 Stocks Goldman Sachs Thinks Will Crush the S&P 500's Performance in 2019

Dropbox Is the New Defensive Stock to Own With the Market Falling Apart

Dropbox Is the New Defensive Stock to Own With the Market Falling Apart

3 Warning Signs the Stock Market Could Collapse

3 Warning Signs the Stock Market Could Collapse

This Should Be Your Retirement Savings Plan When the Stock Market Crashes

This Should Be Your Retirement Savings Plan When the Stock Market Crashes

TheStreet's Top Columnists Take Your Questions on What Stocks to Buy

TheStreet's Top Columnists Take Your Questions on What Stocks to Buy