Real Estate

Tax expense pushes Toll Brothers earnings down

Builder still in line with analyst estimates

According to Bloomberg, Toll Brothers' (TOL) third-quarter earnings stayed on par with analyst expectations, dropping 24% to $46.6 million, or 26 cents a share, from $61.6 million, or 36 cents a share, a year earlier. Bloomberg blames a large tax expense for the drop:

Toll Brothers, which mainly serves affluent buyers, is less vulnerable than competitors to rising mortgage rates, which have cooled orders at companies including D.R. Horton Inc., according to Megan McGrath, an analyst with MKM Partners LLC.

“Toll’s high-end buyer is much less interest-rate sensitive than the average homebuyer, which should help differentiate the company from its public homebuilding peers in the near term,” McGrath said. 

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3d rendering of a row of luxury townhouses along a street

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