Forestar Group Makes Analysts Look Bad

Just the facts, Fool.

Seth Jayson
Seth Jayson
Mar 12, 2012 at 12:00AM
Other

Forestar Group (NYSE: FOR) filed its 10-K on Wednesday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Forestar Group crushed expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly, and GAAP earnings per share dropped to a loss. The non-GAAP profit was a surprise, as analysts had predicted a loss.

Gross margins dropped, operating margins grew, and net margins dropped.

Revenue details
Forestar Group logged revenue of $54 million. The two analysts polled by S&P Capital IQ looked for a top line of $26.4 million on the same basis. GAAP reported sales were much higher than the prior-year quarter's $22.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.17. The one earnings estimate compiled by S&P Capital IQ averaged -$0.08 per share on the same basis. GAAP EPS were -$0.65 for Q4 compared to $0.07 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 62.4%, 250 basis points worse than the prior-year quarter. Operating margin was 20.6%, 2,570 basis points better than the prior-year quarter. Net margin was -42.4%, 5,310 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $57.0 million. On the bottom line, the average EPS estimate is $0.11.

Next year's average estimate for revenue is $267.0 million. The average EPS estimate is $0.43.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 66 members rating the stock outperform and 24 members rating it underperform. Among 22 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 18 give Forestar Group a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Forestar Group is buy, with an average price target of $24.

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