The recent Toll Brothers earnings report has the stock down with a weak guidance.
The Toll Brothers earnings report includes guidance for the first quarter of 2019. The company says that it is expecting deliveries during the quarter to range from 1,350 units to 1,550 units. It is also estimating an average price of between $850,000 and $880,000 for these units.
“In November, we saw the market soften further, which we attribute to the cumulative impact of rising interest rates and the effect on buyer sentiment of well-publicized reports of a housing slowdown,” Douglas Yearley, CEO of Toll Brothers (NYSE:TOL), said in a statement. “We saw similar consumer behavior beginning in late 2013, when a rapid rise in interest rates temporarily tempered buyer demand before the market regained momentum.”
The company only talks about its outlook for the first quarter of 2019 in the most recent Toll Brothers earnings report. This was a deliberate decision. CFO Martin Connor says that this is due to current market conditions making for “a wide range of possible scenarios” for the full year.
The poor outlook for the first quarter of 2019 hampers was is an otherwise solid Toll Brothers earnings report. This includes earnings per share of $2.08 on revenue of $2.46 billion. This is better than its earnings per share of $1.17 on revenue of $2.03 billion from the same time last year. It also beat out Wall Street’s earnings per share and revenue estimate of $1.83 and $2.35 billion for the quarter.
TOL stock dropped by 9% in early morning trading Tuesday, but is now only down 1% as of noon today.
As of this writing, William White did not hold a position in any of the aforementioned securities.