Ryland Homes, Inc., Calabasas, Calif. (NYSE:RYL) on Wednesday after market close reported a wider-than-expected first-quarter loss of $19.5 million, ($0.44) per diluted share. The results compared with a loss of $14.3 million for the comparable period last year. Wall Street was expecting a loss of 31 cents per share.

Half the loss ($0.22 per share) was due to impairments of $9.9 million for the quarter, compared to $5 million in the 2010 first quarter. Analysts do not normally include impairments in their estimates.

Shares of Ryland closed down 11 cents at $17.55 Wednesday and were trading at $17.52 after hours shortly after the earnings release.

Revenues declined 30.2% from the prior year quarter to $174.9 million. Home building revenue fell 30.3% to $168.6 million for the first quarter on a 30.1% decline in closings to 688 units. The average price remained flat with last years quarter at $245,000.

New orders were down 17.2% to 966. New order dollars fell 13.7% to $238.4 million. The average monthly sales absorption rate declined to 1.5 homes per community from 2.2 homes per community for the quarter ended March 31, 2010. Sales incentives and price concessions totaled 11.6% for the first quarter of 2011, compared to 11.4% for the same period in 2010. The company did not report a cancellation rate.

Community count rse to 218 from 207 at the end of 2010 and 177 in the year-ago quarter.

Backlog decreased 23.5% to 1,465 units with a dollar value of $367.4 million, down 21.9% from March 31, 2010.

Gross margin, minus the write-downs, was 15.2%, up from 14.3% in last year's quarter, due primarily to reduced construction costs. Including the write-downs, the margin was 13.9%., up from 12.2% for the first quarter of 2010.

Selling, general and administrative expense totaled 17.3% of home-building revenues for the quarter, up from 13.3% for the first quarter of 2010. The company attributed the increase to "lower leverage that resulted from a decline in revenues and to severance charges that totaled $1.8 million primarily related to the Company's consolidation of its regional homebuilding management group in January 2011."

The financial services segment reported pretax earnings of $1.2 million, compared to pretax earnings of $472,000 for the same period in 2010.

Ryland ended the quarter with cash, cash equivalents and marketable securities of $685.9 million at March 31, 2011, down from $739.2 million a year earlier. The net debt-to-capital ratio was 28.7% at March 31, 2011, compared to 22.% at December 31, 2010. Long-term debt was listed at $880 million. Subsequent to the close of the quarter, the company in April paid$28.2 million to repurchase $27.5 million of its 5.4 percent senior notes due 2015.

Adam Rudiger, home building analyst at Wells Fargo, took the results as a proxy for the rest of the industry. "These results indicate to us that the spring selling season for RYL and for the industry was much softer than investors initially expected as we entered 2011," he wrote in his research note. "RYL's gross margin and SG&A/sales were both better than we expected, but we believe the weaker than expected orders will overshadow income statement improvements."

Stephen East at Ticonderoga Securities sounded a similar-though-more-postive theme. "Our first take on earnings is net positive despite the headline orders number disappointing expectations. With four builders now reporting first-quarter results, it has become quite obvious that the spring selling season is a big dud and Street estimates, ours included, have been much too optimistic. Why are we positive on this report? It's pretty simple: on virtually all controllable items, RYL surpassed our expectations."