This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Forestar Group Inc. Reports Second Quarter 2012 Results

Stocks in this article: FOR

Forestar Group Inc. (NYSE: FOR) today reported second quarter 2012 net income of approximately $0.8 million, or $0.02 per diluted share, compared with a second quarter 2011 net loss of approximately ($3.9) million, or ($0.11) per share outstanding. Second quarter 2012 results include after-tax expenses of approximately $1.6 million, or $0.05 per share, associated with the proposed acquisition of CREDO Petroleum Corporation. Second quarter 2011 results included after-tax expenses of approximately $1.8 million, or $0.05 per share paid to outside advisors related to private debt offerings which were withdrawn due to the deterioration in terms available to us in the capital markets.

“During second quarter we continued to strengthen our balance sheet, generating over $38 million in cash flow and reducing consolidated debt by $26 million. Oil production remains significantly above 2011 levels and increased lot sales activity reflects our ability to deliver lots while inventories in desirable locations remain in short supply,” said Jim DeCosmo president and chief executive officer of Forestar Group. “Our second quarter results continue to increase momentum by accelerating value realization and capitalizing on growth opportunities.”

Second Quarter Highlights

Strategic Initiatives

  • Announced definitive agreement to acquire CREDO Petroleum (NASDAQ:CRED) in an all cash transaction for $14.50 per share, representing an equity purchase price of $146 million
  • Generated over $38 million in cash flow and reduced consolidated debt by $26 million
  • Formed a venture with Canyon-Johnson Urban Funds for the development of Eleven, a 257-unit multifamily community in downtown Austin
  • Formed a venture with Guggenheim Real Estate for development of 360°, a 304-unit multifamily community in the Denver Tech Center submarket

Forestar manages its operations through three business segments: Mineral Resources, Real Estate and Fiber Resources.


  • Oil production up over 120% compared with second quarter 2011, but down 11% compared with first quarter 2012
  • Seven new oil and gas wells completed, including five oil wells and two natural gas wells
  • 541 producing wells operated by exploration and production lessees, up 40 wells compared with second quarter 2011

Segment Financial Results:

($ in millions)     2Q 2012       2Q 2011       1Q 2012
Segment Revenues $7.1 $4.6 $9.4
Segment Earnings $3.9 $3.1 $5.9

Mineral resources segment earnings increased in second quarter 2012 compared with second quarter 2011 principally due to higher oil production, which more than offset lower oil and gas pricing, additional operating costs and reduced lease bonus revenues. Mineral resources segment earnings decreased in second quarter 2012 compared with first quarter 2012 primarily due to lower oil production and reduced delay rental receipts.

1 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs