Forestar Group Inc. has recently released its 10-Q report, providing an in-depth look into its financial condition and operational results. Forestar operates as a residential lot development company in the United States, focusing on land acquisition and infrastructure development for single-family residential communities. The company sells finished residential lots to local, regional, and national homebuilders, with its common stock listed on the New York Stock Exchange under the ticker symbol “FOR.” As of June 30, 2024, D.R. Horton, Inc. owned approximately 62% of Forestar's outstanding common stock, exerting significant influence over its strategic direction and operations.
In the 10-Q report's "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section, Forestar highlighted its primary business activities, including the acquisition of land, infrastructure development, and sales of residential single-family finished lots. The company's real estate segment, which is its core business, generates the majority of its revenues. As of June 30, 2024, Forestar's lot position consisted of 102,100 residential lots, with approximately 57,900 owned and 44,200 controlled through purchase contracts. During the nine months ended June 30, 2024, the company sold 9,694 lots with an average sales price of $96,300, resulting in revenues of $958.0 million, an 8% increase from the prior year period.
The report also delves into the company's operational results, including income before income taxes, residential lots sold, average sales price per lot, and revenues. Forestar's revenues for the three months ended June 30, 2024, amounted to $318.4 million, with residential lot sales contributing significantly to the total revenues. The company sold 3,255 residential lots during the same period, with an average sales price per lot of $94,000.
Additionally, the report provides insights into cost of sales, real estate impairment, land option charges, interest incurred, selling, general and administrative (SG&A) expense, and income taxes. Forestar's SG&A expense for the three and nine months ended June 30, 2024, was $29.3 million and $86.5 million, respectively, representing 9.2% and 9.0% of revenues. The company also reported income tax expenses of $12.9 million and $39.8 million for the same periods, with an effective tax rate of 25.0% and 24.6%, respectively.
Furthermore, the report details Forestar's land and lot position, liquidity, and capital resources. As of June 30, 2024, the company had $359.2 million in cash and cash equivalents, as well as $385.2 million in available borrowing capacity on its revolving credit facility.
As a result of these announcements, the company's shares have moved 7.1% on the market, and are now trading at a price of $32.84. For the full picture, make sure to review Forestar's 10-Q report.
