Toll Brothers Inc (NYSE:TOL) stock rose 2.92% (As on December 6, 11:25:59 AM UTC-4, Source: Google Finance) after the company reported better-than-expected fourth-quarter results despite a tough macroeconomic backdrop amid higher mortgage rates that weighed on new home sales. Net income were $445.5 million compared to net income of $640.5 million in FY 2022’s fourth quarter. This decline was partly due to the absence of a one-time net after-tax benefit related to a litigation settlement that boosted the prior year’s results. Pre-tax income for the quarter also fell to $605.0 million from $841.1 million year-over-year.

Moreover, Home sales revenues for the quarter were $2.95 billion, marking an 18% decrease compared to the same period last year, with delivered homes down by 27%. However, the net signed contract value saw a significant increase of 53% to $2.01 billion, and contracted homes rose by 72%. The company signed 2,038 net contracts at an average price of $989,000. Contracts were up 72% in units compared to last year’s fourth quarter and down 11% in average price, reflecting the strategic shift in mix.  The backlog value at the end of the quarter was $6.95 billion, down 22% year-over-year. Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 28.7%, compared to FY 2022’s adjusted home sales gross margin of 27.5%.

TOL in the fourth quarter of FY 23 has reported the adjusted earnings per share of $4.11, beating the analysts’ estimates for the adjusted earnings per share of $3.71. The company had reported the adjusted revenue growth of 35.9 percent to $3.02 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $2.78 billion. This is driven by a 120-basis point increase in adjusted gross margin to 28.7% and a 90-basis point decrease in SG&A expense to 9.2%.  At year end, the book value per share was $65.49 and the company generated a return on beginning equity of 22.8% for the year.

Additionally, the Company repurchased approximately 7.9 million shares at an average price of $72.00 per share for a total purchase price of approximately $565.9 million.

For Q1, the homebuilder guided deliveries of 1,800 to 1,900 units at a average price per home of $985,000 to $1.005M.

Looking further ahead, deliveries for fiscal 2024 were forecast in a range of 8,850 to 10,350 at an average price of $940,000 to $960,000.