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NEW YORK (TheStreet) -- Toll Brothers (TOL) - Get Free Report shares are dropping 1.3% to $36.51 in early market trading after the property development company reported mixed first quarter earnings results before the opening bell today.

The Horsham, PA-based company reported first quarter earnings of 37 cents per share, 2 cents better than analysts were expecting during the period. However, soft home sales caused the company's revenue to fall 1% year over year to $852 million, missing analysts' $861.22 million estimates. 

The company did see an increase in the average price of the homes it delivered to $713,000 from $706,000.

"As we look to FY 2016, we currently expect gross margin and net income growth based on an increase in the average price of our homes, our growing and profitable presence in California, increased revenues projected from our City Living division, and overall solid current demand in most of our markets," said CFO Martin P. Connor.

TheStreet Ratings team rates TOLL BROTHERS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TOLL BROTHERS INC (TOL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, impressive record of earnings per share growth and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

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