Forestar Group Inc. reported a decline in financial performance for the three months ended December 31, 2024, with revenues totaling $250.4 million, down 18% from $305.9 million in the same period last year. The company's net income also decreased significantly, falling to $16.5 million from $38.2 million, resulting in a basic net income per share of $0.32, compared to $0.76 in the prior year. The decrease in revenue and profitability was attributed to builders moderating their pace of new home starts to align with current market conditions and to sell through existing inventories.
The company's total assets increased to $2.96 billion as of December 31, 2024, up from $2.84 billion at the end of the previous quarter. This growth was primarily driven by a rise in real estate assets, which reached $2.74 billion, compared to $2.27 billion in the prior quarter. However, total liabilities also rose to $1.35 billion, up from $1.25 billion, largely due to an increase in debt, which climbed to $806.8 million from $706.4 million. The company's debt-to-capital ratio increased to 33.3% from 30.7% in the previous quarter, reflecting a higher leverage position.
In terms of operational developments, Forestar's lot sales decreased by 26% year-over-year, with 2,333 lots sold at an average price of $105,500. The company has expanded its operations across 62 markets in 24 states, with a total of 106,000 residential lots owned or controlled as of December 31, 2024. This includes 68,300 lots owned and 37,700 lots controlled through purchase contracts. The company continues to focus on developing affordable housing, despite challenges such as elevated development costs and delays in municipal approvals.
Looking ahead, Forestar remains optimistic about its market position, citing its strong liquidity with $132 million in cash and $512.5 million available under its revolving credit facility. The company plans to maintain a disciplined approach to land investments and manage its lot sales pace to optimize returns. Forestar's strategic relationship with D.R. Horton, which owns approximately 62% of the company, is expected to play a crucial role in navigating market challenges and capitalizing on growth opportunities in the residential lot development sector.
About Forestar Group Inc.
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