Yahoo Finance Forestar Group Inc (FOR) (Q2 2024) Earnings Call Transcript Highlights: Robust Growth and ...
Net Income: Increased 67% to $45 million.
Earnings Per Share (EPS): $0.89 per diluted share, up from $0.54 in the prior-year quarter.
Revenue: Grew 11% to $333.8 million.
Pre-Tax Income: Rose 64% to $58.9 million.
Pre-Tax Profit Margin: Improved to 17.6% from 11.9%.
Gross Margin: Increased to 24.9% from 18.5%.
Lots Sold: Increased 10% to 3,289 lots.
Average Sales Price of Lots: $98,400, influenced by geographic and lot size mix.
SG&A Expenses: Rose 33% to $29.2 million.
Return on Equity: 14.9% for the trailing 12 months.
Land Investments: $350 million invested in land and development during the quarter.
Total Lot Position: Increased 26% to 96,100 lots.
Liquidity: Ended the quarter with approximately $800 million.
Total Debt: $706 million with no senior note maturities until fiscal 2026.
Book Value Per Share: Increased to $29.09, up 16% from a year ago.
Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you clarify if the 6,300 finished lots will all be delivered this year? A (Katie Smith, Director of Finance and Investor Relations): No, some of those will roll into fiscal 2025 due to structured land takedowns, where a builder might take 25 lots per quarter.
Q: Is the normalized gross margin of 22.5% sustainable going forward? A (James Allen, Chief Financial Officer, Executive Vice President): Yes, the 22.5% gross margin is sustainable and aligns with our normalized margins over the past ten quarters.
Q: In which markets do you see increased demand but low supply of lots, and where is land more available? A (Anthony Oxley, President, Chief Executive Officer): Increased demand and low supply are most notable in Florida, Texas, and the Carolinas. There isn't really an abundance of land in any major markets, though some secondary markets might have more availability.
Q: How do you view the year-over-year price appreciation on an apples-to-apples basis? A (James Allen, Chief Financial Officer, Executive Vice President): Excluding significant lot sales, the average selling price for the quarter was around $90,300, which is about 6.5% higher than last year.
Q: What factors could influence whether you achieve the high or low end of your full-year guidance? A (Mark Walker, Chief Operating Officer, Executive Vice President): Our confidence in delivering 14,500 to 15,500 lots is based on current market conditions and lot delivery timing, setting us up for solid year-over-year growth.
Q: How are you expanding relationships with third-party builders? A (Anthony Oxley, President, Chief Executive Officer): We aim to grow our footprint with D.R. Horton and increase our overall market presence. We are engaging with multiple builders, especially in larger projects, to complement our offerings and enhance asset monetization.
Q: What was the market reaction to your quarterly performance, and how do you interpret it? A (Katie Smith, Director of Finance and Investor Relations): Despite strong quarterly results with significant increases in net income and revenue, the stock reaction was unexpectedly negative. We are keen to understand investor perspectives on this.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
