Shares of Toll Brothers (TOL) tumbled 6.34% in after-hours trading on Tuesday, following the release of the company's fiscal 2025 third-quarter results. The significant drop came despite the luxury homebuilder surpassing analysts' expectations for both earnings and revenue.

Toll Brothers reported adjusted earnings per share of $3.73, comfortably beating the consensus estimate of $3.59. This represents a 3.61% increase from the same period last year. The company's quarterly sales reached $2.95 billion, exceeding the analyst forecast of $2.85 billion and marking a 7.96% year-over-year growth. Additionally, Toll Brothers achieved a home sales adjusted gross margin of 27.5% for the quarter.

Despite these strong numbers, investors appeared to react negatively to the company's outlook. Toll Brothers provided guidance for its fourth quarter, projecting deliveries of 3,350 units. For the full fiscal year, the company expects total deliveries of 11,200 units. The stock's sharp decline suggests that market participants may have been anticipating even stronger results or harboring concerns about the company's future performance in light of broader economic uncertainties affecting the housing market. As the after-hours reaction unfolds, investors will be closely watching for any additional insights from management regarding the company's strategy and outlook in the coming quarters.