Shares of Forestar Group Inc. (FOR) plummeted 5.46% in pre-market trading on Thursday following the release of its fiscal 2025 second-quarter results that fell short of analysts' expectations and a reduction in its full-year guidance.

The residential lot developer reported earnings of $0.62 per share for the quarter, missing the analyst consensus estimate of $0.79 by 21.52%. Revenue also disappointed, coming in at $351 million versus the expected $379.6 million, representing a 7.54% shortfall. The company's net income for the quarter decreased 30% year-over-year to $31.6 million.

Forestar also updated its guidance for fiscal 2025, now expecting to deliver between 15,000 and 15,500 lots, generating $1.5 billion to $1.55 billion in revenue. This is down from the previous forecast of 16,000 to 16,500 lots and $1.6 billion to $1.65 billion in revenue. The company cited ongoing home affordability constraints and declining consumer confidence as factors impacting the pace of new home sales, resulting in a slower than expected start to the spring selling season. These challenges in the housing market appear to be weighing heavily on investor sentiment, contributing to the sharp decline in Forestar's stock price.