Earnings Preview: Toll Brothers

Toll Brothers (TOL) is expected to report Q4 earnings before market open Thursday, December 4, with a conference call scheduled for 2:00 pm ET.

Guidance

Analysts are looking for a loss of (47c) on revenue of $681.36M. The consensus range is (68c)-(20c) for EPS, and revenue of $613M-$726.4M, according to First Call. On November 11, the company reported Q4 homebuilding revenues of $691M on backlog of approximately $1.33B and $266.7M in signed contracts, a decline of 35%, 38% and 18%, respectively, compared to Q407. The company said it was not comfortable giving guidance for 2009.

Analyst Views

On December 1, the company was upgraded to Neutral from Underperform at Credit Suisse, which cited less severe expectations for future asset value impairments and also positive implications from overall improving housing affordability. Raymond James analyst Paul Puryear said that while the banking system, brokerages and others will benefit from the $700B financial bailout fund, "very little progress is being made toward stabilizing the rapidly depreciating U.S. residential home prices."

Despite the recent selloff of the shares, S&P views Toll Brothers as superior to peers, with its strong liquidity and with most of its debt not maturing until 2011. The firm believes the company's large land holdings relative to peers may serve the company well should the housing market recover in the next 12-18 months. Many of its properties are located in attractive coastal markets where land acquisitions and municipal approvals are challenging. The firm also says Toll Brothers has the strongest position in the luxury segment, which may recover ahead of mainstream housing.

Comments

[notsosmart:]

thats right.listen to the anal sts.OL

2008 Dec 04 01:37 PM

[Pipo:]

Read Robert Toll (Toll Brothers CEO) comments on his company prospects. TOL is only down 2% in the last year. Quite impressive for a homebuilder.

ceotalk.blogspot.com/

2008 Dec 05 07:20 AM