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FORESTAR RE GROUP Reports Operating Results (10-Q)

November 05, 2009 | About:
10qk

10qk

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FORESTAR RE GROUP (FOR) filed Quarterly Report for the period ended 2009-09-30.

Forestar Group Inc. formerly known as Forestar Real Estate Group Inc. operates in two business segments: real estate and natural resources. The real estate segment owns directly or through ventures real estate. The natural resources segment manages acres of oil and gas mineral interests. In addition the company also sells wood fiber from its land primarily located in Georgia and leases land for recreational uses. Forestar Re Group has a market cap of $551.8 million; its shares were traded at around $15.39 with a P/E ratio of 1539 and P/S ratio of 3.5.

Highlight of Business Operations:

In accordance with our strategic initiatives, in second quarter 2009, we sold about 75,000 acres of timber and timberland in Georgia and Alabama for $119,702,000 to Hancock Timber Resource Group, which acquired the assets on behalf of its investor clients. The transaction generated net proceeds of $116,116,000, which were principally used to reduce debt, and resulted in a gain on sale of $79,214,000. In addition, in third quarter 2009, we sold about 20,000 acres of timber and timberland in Georgia for $38,901,000 to St. Regis Paper Company, LLC, affiliate of Holland M. Ware. The transaction generated net proceeds of $37,735,000 and resulted in a gain on sale of $24,833,000.

Net income was $19,476,000, or $0.54 per basic and diluted share, in third quarter 2009, compared with $872,000, or $0.02 per basic and diluted share, in third quarter 2008. Net income for first nine months 2009 was $66,501,000, or $1.86 per basic share and $1.85 per diluted share, compared with $10,230,000, or $0.29 per basic share and $0.28 per diluted share, in first nine months 2008.

In third quarter 2009, operating expenses principally consist of $2,374,000 in property taxes, $1,312,000 in employee compensation and benefits, $602,000 in community maintenance, $588,000 in professional services, $555,000 in depreciation and $350,000 in marketing and advertising. In third quarter 2008, operating expenses principally consist of $2,469,000 in property taxes, $1,887,000 in employee compensation and benefits, $613,000 in professional services, $553,000 in community maintenance, $534,000 in marketing and advertising and $531,000 in depreciation.

In first nine months 2009, operating expenses principally consist of $7,881,000 in property taxes, $4,395,000 in employee compensation and benefits, $1,663,000 in professional services, $1,593,000 in depreciation, $1,231,000 in community maintenance, $919,000 in marketing and advertising and $787,000 related to legal reserves for probable losses. In first nine months 2008, operating expenses principally consist of $7,489,000 in property taxes, $6,028,000 in employee compensation and benefits, $2,985,000 related to environmental remediation activities,

$1,889,000 in professional services, $1,513,000 in depreciation, $1,427,000 in marketing and advertising and $714,000 in community maintenance.

In first nine months 2009, we sold 14,965 acres of undeveloped land from our owned and consolidated ventures at an average price of $2,433 per acre, generating $36,405,000 in revenues. In first nine months 2008, we sold 3,140 acres of undeveloped land from our owned and consolidated ventures at an average price of $4,695 per acre, generating $14,741,000 in revenues.

Read the The complete ReportFOR is in the portfolios of John Keeley of Keeley Fund Management.

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10qk
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