HORSHAM, Pa. (AP) -- Toll Brothers returned to a profit during the first quarter, but still fell short of Wall Street expectations and shares fell before the opening bell Wednesday.
For the quarter ended Jan. 31, the Horsham, Pa., company reported a profit of $4.4 million, or 3 cents per share and compared with a loss of $2.8 million, or 2 cents per share, in the same quarter last year.
Revenue jumped 32 percent to $424.6 million from $322 million, as the number of homes delivered during the quarter increased 32 percent to 746 units. But the average price of the homes delivered edged down less than 1 percent to $569,000 from $571,000, hurt by a consumer shift toward cheaper homes.
Analysts, on average, expected earnings of 11 cents per share on $505 million in revenue, according to FactSet.
During the recent quarter, the company's number of signed contracts rose 49 percent to 973 units. The contracts had a combined value of $614.4 million, representing a 38 percent increase from the year-ago period. But the average price of those contracts fell 7 percent to $631,000.
With demand rising in the second half of 2012, Toll Brothers began to raise prices and it continues to do so, saying that the increased value of its homes should start to show up in the books during the second half of this year.
Toll Brothers also said Wednesday that it will launch new rental apartment projects on the East Coast totaling about 4,000 units, including two student housing projects that have the capacity to house more than 3,000 people. The apartments are expected to start generating income in fiscal 2015, the company said.
Shares of Toll Brothers Inc. fell $1.05, or 3 percent, to $35.85 in premarket trading.