Published on 22 May 2024 on Zacks via Yahoo Finance
Toll Brothers (TOL) Q2 Earnings Miss, Revenues Beat, Guidance Up
Toll Brothers, Inc. TOL reported mixed results for second-quarter fiscal 2024 (ended Apr 30, 2024), wherein its earnings missed the Zacks Consensus Estimate but revenues beat the same. Nonetheless, both the top and bottom lines increased on a year-over-year basis.Shares of this leading luxury homebuilder gained 1.2% in the after-hours trading session on May 21, 2024, following the earnings release.Toll Brothers' fiscal second-quarter success was driven by strong demand for new homes, bolstered by a resilient economy, favorable demographics, and a significant housing supply shortage. Addressing these market conditions, the company expanded its price points to include more affordable luxury homes and increased its supply of spec homes. These strategies allowed Toll Brothers to increase its market share, reduce cycle times, improve inventory turnover, and better leverage fixed costs, which resulted in revenue growth and higher operating margins. Additionally, a capital-efficient land strategy further enhanced returns, positioning the company for continued attractive returns in the future.Following encouraging fiscal second-quarter performance and encouraging demand trend, the company has revised upward its full-year guidance for revenues and earnings. It now expects earnings per share (EPS) of approximately $14.00 in fiscal 2024 (versus $13.25-$13.75 of prior expectation) with a return on beginning equity of approximately 22%.
Earnings & Revenue Discussion
This Fort Washington, PA-based homebuilder reported EPS of $3.38, which missed the Zacks Consensus Estimate of $4.13 by 18.2% but increased 18.6% from the year-ago period profit level of $2.85. The increase was due to higher revenues.Total revenues (including Home sales and Land sales and others) came in at $2.84 billion, which beat the consensus mark of $2.52 billion by 12.6% and grew 13.2% year over year. The growth was attributable to higher deliveries.