Toll Brothers (TOL) Posts Improved Q4 Adjusted Pre-Tax Income

Toll Brothers (NYSE: TOL) reported Q4 EPS of $0.67, which may not compare with the analyst estimate of $0.99. Revenue for the quarter came in at $1.86 billion versus the consensus estimate of $1.79 billion.

FY 2016 fourth quarter adjusted pre-tax income was $291.8 million, compared to $236.7 million in FY 2015’s fourth quarter.

FY 2017 Financial Guidance

• On November 7, 2016, just after the end of FY 2016, the Company announced the acquisition of Coleman Homes in Boise, Idaho, which involved the acquisition of approximately 1,400 lots owned, 350 lots controlled and the immediate addition of 15 selling communities to the Company’s first quarter FY 2017 community count total.
• In FY 2017, the Company expects Coleman to deliver approximately 300 homes at an average delivered price of $300,000 to $325,000. Due to the impact of purchase accounting and Coleman’s lower gross margins, the Company expects Coleman to reduce company-wide FY 2017 Adjusted Gross Margin by 30 to 40 basis points.
• The Company expects FY 2017 first quarter deliveries of between 1,000 and 1,250 units with an average price of between $750,000 and $780,000, and full FY 2017 deliveries of between 6,500 and 7,500 units with an average price of between $775,000 and $825,000.
• The Company expects its full FY 2017 Adjusted Gross Margin to be between 24.8% and 25.3% of revenues, reflecting the above noted impact from Coleman Homes and other changes in mix of product deliveries.
• SG&A, as a percentage of FY 2017 revenues, is expected to be approximately 10.6%. FY 2017 first quarter SG&A is expected to be approximately 15.2% of first quarter revenues.
• The Company’s full FY 2017 Other income and Income from unconsolidated entities is expected to be between $160 million and $200 million, with approximately $50 million in the first quarter.
• The Company’s FY 2017 tax rate is estimated at 36.2%.

For earnings history and earnings-related data on Toll Brothers (TOL) click here.

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