Forestar Group Inc (FOR, Financial), a leading national residential lot developer, announced its financial results for the fourth quarter and fiscal year ended September 30, 2023, on November 7, 2023. The company reported a substantial year-over-year increase in net income for the fourth quarter, with a 43% jump to $72.4 million, or $1.44 per diluted share. Pre-tax income also rose by 44% to $95.4 million, reflecting a pre-tax profit margin of 17.4%. Revenue growth was equally impressive, with a 44% increase to $549.7 million on 4,986 lots sold.
Fiscal Year 2023 Performance
For the full fiscal year, Forestar Group Inc (FOR, Financial) reported a net income of $166.9 million, or $3.33 per diluted share, a slight decrease from the previous year. Pre-tax income saw a 6% decrease to $221.6 million, with a pre-tax profit margin of 15.4%. The company's revenues also experienced a 5% decline to $1.4 billion. Despite these decreases, the company's return on equity remained strong at 13.2%, and the book value per share increased by 14% to $27.43.
Operational and Financial Highlights
Forestar's operational results showed resilience in the face of market headwinds. The number of lots sold in the fourth quarter increased by 27% compared to the same period in the previous year. However, annual lot sales saw a 21% decrease. The company's lot position remained robust with 79,200 lots owned and controlled as of September 30, 2023. The capital structure and liquidity position were also strong, with $616.0 million in unrestricted cash and $382.3 million in available borrowing capacity, totaling $998.3 million in liquidity.
Strategic Position and Outlook
Daniel Bartok, CEO of Forestar, highlighted the company's strong finish to the year and its strategic positioning.
The supply of vacant developed lots, particularly at affordable price points, continues to be constrained across most of the country. With our strong balance sheet and low leverage, broad geographic footprint, attractive land portfolio and relationship with the nation’s largest builder, Forestar is well-positioned to continue to consolidate market share in the highly fragmented and under-capitalized lot development industry."Looking ahead to fiscal 2024, Forestar expects to deliver between 14,500 and 15,500 lots, generating $1.4 billion to $1.5 billion in revenue.
Forestar Group Inc (FOR, Financial) remains focused on leveraging its strategic relationship with D.R. Horton and its strong balance sheet to navigate the market and enhance long-term value. The company's disciplined approach to capital investment and its ability to adjust to market conditions are expected to position it well for continued growth and market share consolidation.
For more detailed financial information and the full earnings report, please visit Forestar's investor relations website.
Explore the complete 8-K earnings release (here) from Forestar Group Inc for further details.
