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Jun 30, 2022
Forestar Q3 2022 Earnings Report
Forestar reported a strong third quarter with EPS increasing and significant pre-tax profit margin improvement.
Key Takeaways
Forestar Group Inc. reported financial results for the third fiscal quarter ended June 30, 2022. Net income attributable to Forestar increased 151% to $39.7 million, or $0.80 per diluted share. Revenues for the third quarter decreased 1% to $308.5 million.
Net income attributable to Forestar increased 151% to $39.7 million or $0.80 per diluted share
Pre-tax income increased 150% to $52.7 million, while pre-tax profit margin increased 1,040 basis points to 17.1%
Generated $308.5 million of revenues on 3,473 lots sold
Lots sold to customers other than D.R. Horton increased 213% to 435 lots
Forestar
Forestar
Forestar Revenue by Segment
Revenue by Segment
Tract Sales and Other Revenue
CapyFin.com Forward Guidance
Forestar is updating its guidance for fiscal 2022. They now expect their pre-tax profit margin for the full fiscal year to be approximately 14.25%. Additionally, they expect to deliver approximately 17,000 lots generating approximately $1.425 billion of revenue in fiscal 2022.
Positive Outlook
- Forestar's return-focused business model is centered on our high inventory turnover, low risk lot manufacturing strategy.
- Our liquidity and balance sheet strength enables us to effectively operate through changing economic conditions and positions us to be opportunistic when attractive opportunities present themselves.
- We expect continued profitable growth in the coming years, supported by our low net leverage
- We expect continued profitable growth supported by the engagement of our people
- We expect continued profitable growth supported by our strategic relationship with D.R. Horton and 97,000 lots owned and controlled at June 30, 2022.
Challenges Ahead
- Based on our fiscal year-to-date results and current market conditions, including development delays and moderation in housing demand, we are updating our guidance for fiscal 2022.
- We now expect our pre-tax profit margin for the full fiscal year to be approximately 14.25% compared to our prior guidance of 14.0% to 14.5%.
- We expect to deliver approximately 17,000 lots generating approximately $1.425 billion of revenue in fiscal 2022, compared to our prior guidance of between 19,500 and 20,000 lots generating approximately $1.7 billion of revenue.
- Development delays
- Moderation in housing demand