Toll Brothers Inc (NYSE:TOL) stock rose 5.72% (As on December 7, 11:33:03 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the fourth quarter of FY 22. Home sales revenues were $3.6 billion, up 21% compared to FY 2021’s fourth quarter; delivered homes were 3,765, up 13%. Net signed contract value was $1.3 billion, down 56% compared to FY 2021’s fourth quarter; contracted homes were 1,186, down 60%. Backlog value was $8.9 billion at fourth quarter end, down 7% compared to FY 2021’s fourth quarter; homes in backlog were 8,098, down 21%. Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 29.0%, compared to FY 2021’s fourth quarter adjusted home sales gross margin of 25.9%. The company’s balance sheet is solid, with over $3.0 billion of liquidity at fiscal year end and a net debt-to-capital ratio of 23.4%. In addition, the company expects to generate significant cash flow from operations in FY 2023. The Company ended its FY 2022 fourth quarter with approximately $1.3 billion in cash and cash equivalents, compared to $1.6 billion at FYE 2021 and $316.5 million at FY 2022’s third quarter end. At FY 2022 fourth quarter end, the Company also had $1.8 billion available under its $1.9 billion bank revolving credit facility, substantially all of which is scheduled to mature in November 2026. The Company ended FY 2022’s fourth quarter with 348 selling communities, compared to 332 at FY 2022’s third quarter end and 340 at FY 2021’s fourth quarter end.

TOL in the fourth quarter of FY 22 has reported the adjusted earnings per share of $4.67, beating the analysts’ estimates for the adjusted earnings per share of $3.88, according to  Zacks Investment Research. The company had reported the adjusted revenue of $3.71 billion in the fourth quarter of FY 22, beating the analysts’ estimates for revenue of $3.22 billion.

Meanwhile, in this uncertain demand environment, the pricing strategy reflects, for each of the communities, an evaluation of local market dynamics, including elasticity of demand, the size of the backlog and the depth and quality of the land holdings in that market. The company intends to continue making appropriate price adjustments as FY 2023 progresses. The company also plan to grow the community count, replenish the supply of spec inventory in certain markets, and take advantage of shorter cycle times and lower building costs as trades have begun to show signs of increased capacity.