Toll Brothers Beats Estimates (TOL)

Toll Brothers Inc. (NYSE: TOL), the country's leading builder of luxury homes, announced on Wednesday morning that it beat consensus Wall Street estimates.

Toll Brothers Inc. (TOL) reported that it swung to a 3rd quarter profit, reporting net income of $27.3 million, or 16 cents per share, after a loss of $472.3 million, or $2.93 per share, a year earlier.

Revenue fell to $454.2 million, down from $461.3 million a year earlier.

According to a survey of analysts by Thomson Reuters, the average Wall Street estimate called for a loss of 14 cents per share, on revenue of $395.32 million.

Toll Brothers Inc closed the previous trading session at $16.19 per share. Analysts covering the company's stock give it a consensus price target of $21.77 per share.

Chief executive officer Douglas C. Yearley Jr. said, "We were pleased to return to profitability this quarter, especially with volumes down 65% from our peak. Although revenues and unit deliveries for the quarter were relatively flat compared to one year ago, our gross margin, before write-offs, improved by 350 basis points. While much of this quarter's profitability was due to tax benefits, we are encouraged by the decline in impairments and our fifth consecutive quarter of more normalized cancellation rates after three years of elevated rates.

"Another bright spot has been the performance of our high-rise projects in the metro New York City urban market built under the Toll Brothers City Living brand. Among these are several 50% joint ventures, which, in FY 2010's third quarter, produced $38.5 million of contracts versus $17.7 million the previous year, and which ended this third quarter with a backlog of $103.0 million versus $19.4 million in FY 2009's same quarter. These joint ventures should continue to contribute profits for the next several quarters."

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