Forestar Group blows past earnings estimates, shares rise

Aug 7, 2014
Austin Business Journal

Forestar Group Inc., an Austin-based real estate, energy and fiber resource company, saw its share price rise Wednesday after the company reported quarterly financial results that beat analysts' expectations


Forestar Group shares reached as high as $20.13 and ended the session up $1.28, or nearly 7 percent, to close at $19.98


“During the second quarter, residential lot sales remained strong and we are developing lots commensurate with inventories and home buyer demand. Multifamily market conditions remain favorable in our target markets, and we continue to acquire sites in 'A' locations to grow our business," said Jim Decosmo, Forestar Group's president and CEO


The company reported second quarter net income of about $14.8 million, or 34 cents per share, on revenue of $83 million compared with second quarter earnings last year of just $500,000, or 2 cents per share. The earnings per share far outstripped analysts expectations of 10 cents per share for the quarter


Forestar Group saw sales of developed residential lots jump by 50 percent in the second quarter of 2014 when compared to the same time period last year, rising to 537 residential lots sold


The company also saw increased oil production, up 65 percent compared with the second quarter of 2013, with 31 new wells. At the same time, the company sold non-core producing oil and gas wells in Oklahoma for an additional $4.5 million


Looking ahead, the company expects its oil and natural gas production to increase by 30 percent in the second half of 2014, with total anticipated production to exceed 1.2 million barrels, a 15 percent increase compared to 2013


Forestar Group is one of the largest publicly-traded companies to be based in the Austin area, according to data compiled in the Austin Business Journal's Book of Lists, ranked at No. 19 by fiscal 2012 revenue. It employs roughly 65 locally, with a total workforce of 135



Print Article opens in new window