Toll Brothers Looks for Bottom: Fool by Numbers

• Email
• Share
• Print

On Feb. 22, luxury home builder Toll Brothers (NYSE: TOL) released first-quarter earnings for the period ended Jan. 31.

• Revenue decreased by 18.7% to $1.09 billion, primarily because of reductions in traditional home sales.
• Margins dropped across the board.
• Management believes there are too many soft markets at the moment to call a bottom in the new home market.
• Motley Fool CAPS players don't see a bottom either. They've awarded Toll Brothers, Centex (NYSE: CTX), and Ryland (NYSE: RYL) one-star ratings.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$1,090.6	$1,341.0	(18.7%)
Net Profit	$54.3	$163.9	(66.9%)
EPS	$0.33	$0.98	(66.3%)
Diluted Shares	164.0	167.0	(1.8%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
Gross Margin	17.9%	28.1%	(10.3)
Operating Margin	4.7%	17.7%	(13.0)
Net Margin	5.0%	12.2%	(7.2)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$449.2	$689.2	(34.8%)
Accounts Rec.	$144.0	$178.0	(19.1%)
Inventory	$6,182.3	$5,531.1	11.8%

Liabilities	Q1 2007	Q1 2006	Change
Accounts Payable	$253.4	$226.8	11.7%
Long-Term Debt	$1,490.3	$1,491.5	(0.1%)

Learn the ways of the balance sheet.

Cash Flow Highlights

No data available. Lame.

Find out why Fools always follow the money.

Related Foolishness:

• Toll Brothers' Dancing CEO
• Housing Construction Takes One on the Chin
• Homebuilders Defying Housing Numbers

How do you think Toll Brothers will do in the next few weeks? How about the next few years? Join Motley Fool CAPS, the Fool's new community-intelligence stock-rating service, and tell more than 23,000 fellow investors how you feel.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.