Toll Brothers Earnings: Here’s Why the Stock is Falling Now

Toll Brothers Inc. (NYSE:TOL) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 3.52%.

Toll Brothers Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $0.03 in the quarter versus EPS of $-0.02 in the year-earlier quarter.

Revenue: Rose 31.88% to $424.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Toll Brothers Inc. reported adjusted EPS income of $0.03 per share. By that measure, the company missed the mean analyst estimate of $0.1. It missed the average revenue estimate of $502.17 million.

Quoting Management: Douglas C. Yearley, Jr., Toll Brothers’ chief executive officer, stated: “Demand has increased. With our first quarter contracts up 49%, and contracts for the first three weeks of our second quarter up 40% versus comparable periods in FY 2012, it appears that momentum is building. We are continuing to gain market share and see little competition from local private builders. As the Spring selling season kicks off, we are also enjoying increasing pricing power due to the release of pent-up demand colliding with limited supply in the affluent markets where we operate.”

Key Stats (on next page)…