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Toll Brothers Q4 Earnings a Harbinger of Things to Come?
John McManus / BUILDER magazine / December 11, 2013
Toll Brothers net income for Q4 was just shy of a nice round $100 million. It’s full fiscal year and fourth quarter earnings release blasted this morning to a chorus of kudos from home building company equity analysts. Here’s the link to Wall Street Journal staffer Ben Fox Rubin’s take on the earnings report (paywall).
Our preliminary take-away is this. Toll Brothers management and team held a clinic on how to manage their enterprise, given the opportunities that surfaced early last year and crescendoed this past Spring. It’s an organization that knows who it is and what it does well, despite its heft and positioning.
So, within its own context, expectations are that the Toll organization will continue to knock it out of the park.
The worry, however, shows up in light of the exogenous issues that may or may not derail momentum for the entire sector.
Next update will look at Toll and the wall of worry. As a bellwether, what goes down with Toll may preview what’s in store for others. Toll’s pure-play against a higher-end luxury buyer offers both lessons for others and constraints upon assumptions that apply to builders competing in the entry-level and lower-mid-level move-up programs.
Late in the day yesterday, the business press swarmed the Toll earnings report for its larger than life implications.