Forestar Group Inc. (NYSE: FOR) has reported its fiscal 2025 second quarter results, revealing several key financial and operational highlights. The company's net income for the second quarter decreased by 30% to $31.6 million, or $0.62 per diluted share, compared to $45.0 million, or $0.89 per diluted share, in the same quarter of fiscal 2024. Additionally, pre-tax income for the quarter decreased by 31% to $40.7 million from $58.9 million in the same quarter of fiscal 2024.
On the positive side, consolidated revenues increased by 5% to $351.0 million, and residential lots sold increased by 4% to 3,411 lots. The company owned and controlled 105,900 lots at the end of March 2025. Notably, Forestar's return on equity for the trailing twelve months ended March 31, 2025, was reported at 10.7%.
However, the company's operational results also showed a decrease in lots sold during the six months ended March 31, 2025, which decreased by 11% to 5,744 lots compared to the same period of fiscal 2024.
Forestar's capital structure, leverage, and liquidity position at the end of the quarter revealed that it ended with $174.3 million of unrestricted cash and $617.7 million of available borrowing capacity on its senior unsecured revolving credit facility, totaling $792.0 million in liquidity. The company also issued $500 million of 6.50% senior unsecured notes due 2033 and completed a tender offer to purchase $329.4 million of existing 3.85% senior unsecured notes due 2026.
Looking ahead, the company revised its guidance for fiscal 2025, expecting to deliver between 15,000 and 15,500 lots generating $1.5 billion to $1.55 billion of revenue, compared to its prior guidance of between 16,000 and 16,500 lots generating $1.6 billion to $1.65 billion of revenue. Donald J. Tomnitz, Chairman of the Board, highlighted that despite the challenges in the market, Forestar is uniquely positioned to provide essential finished lots to the homebuilding industry, supported by a strong balance sheet and liquidity.
Forestar Group Inc. is a residential lot development company with operations in 65 markets and 24 states, and it is a majority-owned subsidiary of D.R. Horton, the largest homebuilder by volume in the United States since 2002. The market has reacted to these announcements by moving the company's shares -1.4% to a price of $18.77. Check out the company's full 8-K submission here.
