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Toll Brothers Q1 Profit Surges; Sees Higher Revenues In FY18

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Toll Brothers, Inc. (TOL), a builder of luxury homes, on Tuesday reported an 88 percent surge in net profit for the first quarter from last year, reflecting higher home deliveries and a tax benefit related to the U.S. tax reform.

Looking ahead, the company tightened its outlook for fiscal 2018 home deliveries and forecast revenues to be higher than in the prior year.

Net income for the first quarter rose to $132.11 million or $0.83 per share from $70.42 million or $0.42 per share last year.

On average, analysts polled by Thomson Reuters expected earnings of $0.61 per share for the quarter. Analysts' estimates typically exclude special items.

As a result of the Tax Cuts and Jobs Act enacted in December 2017, the latest quarter's net income was favorably impacted by a $31.2 million tax benefit associated with the revaluation of the company's net deferred tax liability.

Revenues for the quarter grew 28 percent to $1.18 billion from $920.73 million in the year-ago period. Analysts expected revenues of $1.18 billion.

Home building deliveries of 1,423 units increased 20 percent from 1,190 units last year. The average price of homes delivered rose to $826,000, due to changes in product mix, compared to $773,700 last year.

The company's first-quarter net signed contracts of $1.69 billion and 1,822 units, increased 36 percent in dollars and 20 percent in units, respectively from the year-ago period.

First-quarter-end backlog of $5.58 billion and 6,250 units increased 28 percent in dollars and 21 percent in units, compared to the same period last year.

Looking ahead to the second quarter, Toll Brothers forecast home deliveries of between 1,825 and 1,925 units, with an average price of between $825,000 and $850,000.

The company now projects fiscal 2018 home deliveries of between 7,800 and 8,600 units with an average price of between $820,000 and $860,000. Earlier, the company expected full-year deliveries of between 7,700 and 8,700 units with an average price of between $810,000 and $860,000.

The revised outlook translates to projected revenues between $6.40 billion and $7.40 billion in fiscal 2018, compared to $5.82 billion in fiscal 2017. The Street expects revenues of $6.92 billion.

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