NYSE$FOR

Forestar Group Inc · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Forestar reported a decrease in net income and revenues for the second quarter of fiscal year 2023, while maintaining double-digit pre-tax profit margins and return on equity.

Forestar Group Inc. reported a decrease in net income attributable to Forestar to $26.9 million, or $0.54 per diluted share, and a decrease in revenues to $301.5 million for the second quarter ended March 31, 2023. The company's pre-tax income also decreased to $35.9 million. Despite the transitioning housing market, the company maintained a strong balance sheet and adapted to changing builder demand.

  • Net income attributable to Forestar totaled $26.9 million or $0.54 per diluted share.
  • Pre-tax income was $35.9 million, with a pre-tax profit margin of 11.9%.
  • Consolidated revenues reached $301.5 million on 2,979 lots sold.
  • The company owned and controlled 76,400 lots.

Headline financials

Total Revenue

$302M

Previous: $422M-28.5%
EPS (adj)

$0.54

Previous: $0.96-43.7%
Lots Sold

3.0K

Previous: 5.8K-48.5%
Avg Sales Price/Lot

$84.7K

Previous: $81.9K+3.4%
Capital Expenditures

-$300K

Previous: -$2.5M+88.0%
Free Cash Flow

$26.6M

Previous: $45.3M-41.3%
Net Income

$26.9M

Previous: $47.8M-43.7%
Operating Income

$30.1M

Previous: $59.4M-49.3%
Gross Profit

$55.9M

Previous: $87.5M-36.1%
Cash & Equivalents

$287M

Previous: $234M+22.7%
Total Assets

$2.34B

Previous: $2.23B+4.7%
Stock-Based Comp

$1.9M

Previous: $1.6M+18.8%

Revenue & EPS history

Forestar · Revenue · Quarterly

$302M

Q2 2023-28.5%vs Q2 2022
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

Forestar · $41.1M total across 1 segment · Q2 2023

  • Tract Sales & Other
    $41.1M+41000.0%

Forward guidance

While not providing annual guidance due to market uncertainty, Forestar expects to continue consolidating market share in the U.S. residential lot development industry. The company's strong balance sheet and liquidity provide financial and operational flexibility, and they plan to maintain a disciplined approach when investing capital.

Tailwinds

  • Commitment to operational excellence
  • Relentless focus on execution
  • Ability to deliver strong profitability
  • Ability to maintain competitive returns through changing market conditions
  • Will continue to strive to maximize returns by balancing pace of sales and lot pricing.

Headwinds

  • Uncertainty in the market
  • Cannot control the macroeconomic backdrop
  • Cannot directly influence the demand for housing
  • Transitioning housing market
  • Inflationary environment

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2023

Historical avgQ2 2023

+0.2%

Avg return

Earnings day

+1.4%

Avg return

5 days after

+3.6%

Avg return

30 days after

49%

32 / 65 earnings

Positive

+17.9%

Q4 2017

Best reaction

-15.3%

Q3 2018

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026+0.4%+6.3%-1.3%
Q1 2026-4.6%-9.6%+8.2%
Q4 2025+6.6%-0.2%-1.0%
Q3 2025+0.6%+1.3%+1.8%
Q2 2025-0.6%+1.6%+6.2%
Q1 2025-10.1%-12.4%-14.0%
Q4 2024+0.9%-1.9%-5.6%
Q3 2024-14.8%-11.4%-18.6%
Q2 2024-7.5%-7.9%+2.4%
Q1 2024-8.7%-6.2%-6.9%
Q4 2023+14.9%+14.3%+20.3%
Q3 2023+13.1%+21.6%+19.9%
Q2 2023+10.4%+17.0%+31.7%
Q1 2023-9.7%-10.7%-15.6%
Q4 2022+15.9%+17.2%+32.0%
Q3 2022-6.2%-6.9%-11.6%
Q2 2022-3.5%-2.9%-6.1%
Q1 2022+8.8%+11.7%+1.9%
Q4 2021+3.2%+2.2%-2.5%
Q3 2021+12.4%+12.4%+5.3%
Q2 2021-1.1%-0.5%-9.8%
Q1 2021-1.1%-1.6%-3.2%
Q4 2020+5.6%+7.1%+12.5%
Q3 2020+2.7%+5.4%+9.1%
Q2 2020+0.9%+13.0%+24.0%
Q1 2020-0.4%-9.2%-2.3%
Q4 2019+3.2%+4.0%+4.9%
Q3 2019+3.0%+6.8%-5.2%
Q2 2019+0.8%+1.5%-2.6%
Q4 2018-0.4%+1.6%+7.6%
Q3 2018-15.3%-16.4%-20.3%
Q2 2018+1.1%+0.0%+5.5%
Q1 2018-2.2%-4.8%+2.8%
Q4 2017+17.9%+11.0%+6.7%
Q3 2017-4.8%-1.4%+27.0%
Q2 2017-0.9%-0.9%+0.3%
Q1 2017+0.0%+0.0%+14.9%
Q4 2016-1.5%-1.5%+2.6%
Q3 2016+3.5%+9.7%+19.8%
Q2 2016-2.0%-2.6%+2.5%
Q1 2016-5.9%
Q4 2015+10.0%
Q3 2015-5.8%
Q2 2015+3.0%
Q1 2015-5.8%
Q4 2014+8.3%
Q3 2014+0.5%
Q2 2014+0.0%
Q1 2014-5.9%
Q4 2013-0.5%
Q3 2013-6.3%
Q2 2013-4.9%
Q1 2013+5.0%
Q4 2012+3.7%
Q3 2012-10.0%
Q2 2012+4.0%
Q1 2011-1.1%
Q1 2012+2.3%
Q4 2009+5.4%
Q4 2011+5.4%
Q3 2010+3.5%
Q3 2011+3.5%
Q2 2010-9.2%
Q2 2011-9.2%
Q4 2010-9.2%

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