Forestar Achieves Strong Third Quarter Results, Delivering on Growth and Efficiency Promises
In a recent conference call, Forestar announced its third quarter 2026 results, showcasing solid growth across various key metrics. According to Andy Oxley, the company's President and CEO, Forestar's teams achieved notable results with revenues reaching $407 million, up 4% from the prior year quarter.
Forestar also reported an increase in earnings per diluted share by 8%, reaching $0.70, while pre-tax income increased 12% to $48.7 million. Book value per share rose 10% from a year ago to $36.40, reflecting the company's growing financial health.
The contracted backlog remained strong with visibility towards $2.3 billion of future revenue. However, ongoing affordability constraints and cautious consumer sentiment continued to impact the pace of new home sales, prompting Forestar to manage its inventory investments with discipline and flexibility.
One notable achievement highlighted by Andy Oxley was the delivery of Forestar's 100,000th lot since D.R. Horton made its transformative investment in the company in 2017. This milestone signifies Forestar's growth into a proven scalable platform.
Looking ahead, Jim Allen, Chief Financial Officer, discussed the company's focus on turning land and lot inventory efficiently, maximizing returns, and consolidating market share. With a strong balance sheet, operating expertise, and a diverse national platform, Forestar is well-positioned to navigate market conditions and extend its leadership position in the highly fragmented lot development industry.
Jim Allen also provided further details on the company's third quarter financial results. Net income attributable to Forestar increased 9% to $35.9 million, or $0.70 per diluted share, compared to $32.9 million or $0.65 per diluted share in the prior year quarter.
The pre-tax profit margin increased 80 basis points to 12%, from 11.2% in the prior year quarter. Revenues for the third quarter rose 4% to $407 million, compared to $390.5 million in the prior year quarter.
Mark Walker, Chief Operating Officer, added that Forestar sold 3,659 lots in the quarter with an average sales price of $108,800. The company expects continued quarterly fluctuations in its average sales price based on the geographic and lot size mix of its deliveries.
The gross profit margin for the quarter was 20.7%, compared to 20.4% for the same quarter last year. Chris Hibbetts provided further information on SG&A expense, which increased 2% to $38.3 million, compared to $37.4 million in the prior year quarter.
SG&A as a percentage of revenues was 9.4%, down from 9.6% in the prior year quarter. The company's headcount declined 9% from a year ago, and Forestar expects its headcounts to remain relatively flat for the remainder of the year.
