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Toll Brothers misses 4Q earnings expectations, tops revenue forecasts

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HORSHAM, Pennsylvania — Toll Brothers Inc.'s profit climbed in its fiscal fourth quarter but fell short of Wall Street's view, hurt by inventory impairments and an increase in reserves. But revenue beat analysts' estimates as it delivered more homes at higher prices.

The Horsham, Pennsylvania-based company earned $131.5 million, or 71 cents per share, for the period ended Oct. 31.

The results were slightly below Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 72 cents per share.

Chief Financial Officer Martin Connor said in a statement on Wednesday that there was a $32 million rise in warranty and litigation reserves in the quarter, mostly because of estimated costs associated with known and projected stucco-related repairs at older homes in certain closed communities in Pennsylvania and Delaware. The quarter also included $10.8 million in inventory impairments.

The home builder posted revenue of $1.35 billion in the quarter, up from $1.04 billion a year ago and surpassing Wall Street forecasts. Analysts surveyed by Zacks expected $1.32 billion for the latest quarter.

Home deliveries rose 22 percent to 1,807 units. The average price of homes delivered was $747,000, up from $703,000 in the prior-year period.

For fiscal 2015, Toll anticipates delivering between 5,000 and 6,000 homes at an average price of between $710,000 and $760,000 per home. Toll says the higher end of that range is more achievable if the improvement in demand it has seen since August continues.

The company's stock dropped 97 cents, or 2.5 percent, to $33.92 in morning trading.

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Elements of this story were generated by Automated Insights using data from Zacks Investment Research. TOL stock research report from Zacks.

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Keywords:Toll Brothers,Earnings Report

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