Forestar Group Inc New

Forestar Group delivered a mixed fiscal third quarter, missing Wall Street expectations on both the top and bottom lines as rising costs weighed heavily on profitability despite robust revenue growth. The residential lot developer posted earnings of $0.65 per diluted share on revenues of $390.50 million for the period ended June 30, 2025, falling short of the consensus EPS estimate of $0.76 by 14.17% and nudging just below the $392.00 million revenue target by 0.38%, even as sales climbed 22.6% year over year. The core problem was margin compression: cost of sales surged to $310.80 million from $246.90 million in the prior-year period, while SG&A expenses rose to $37.40 million, pushing net income down 15% to $32.90 million. Notably, the prior-year quarter also included a $5.00 million asset-sale gain that did not repeat. Despite the earnings shortfall, shares rose in pre-market trading as investors focused on Forestar's $2.30 billion contracted lot pipeline and maintained revenue guidance of $1.50 billion to $1.55 billion for fiscal 2025, even as the company trimmed its lot delivery outlook to 14,500 to 15,000 units, citing affordability pressures and softer consumer confidence.