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Digital Realty (DLR) Meets Q3 FFO Estimates, Lowers View
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Digital Realty Trust (DLR - Free Report) delivered third-quarter 2022 core funds from operations (FFO) per share of $1.67, up from the $1.65 reported in the year-ago period. The figure also matched the Zacks Consensus Estimate.
The company registered operating revenues of $1.19 billion in the third quarter, marking a 5.2% year-over-year increase. Operating revenues outpaced the Zacks Consensus Estimate by just 0.3%.
Adjusted EBITDA of $620 million in the quarter marked a 2% increase year over year.
Per Digital Realty’s CEO, Bill Stein, "Digital Realty again delivered record quarterly bookings in the third quarter, our third record in the past four quarters, reflecting the strong global demand for data center solutions."
Quarter in Detail
In the reported quarter, signed total bookings were estimated to generate $176 million of annualized GAAP rental revenues, including the $13-million contribution from interconnection, excluding any contribution from Teraco. The weighted-average lag between the new leases signed in the third quarter and the contractual commencement date was 17 months.
Digital Realty signed renewal leases, marking $156 million of annualized GAAP rental revenues during the September-end quarter, excluding any contribution from Teraco. Rental rates on renewal leases signed during the quarter rolled down 0.5% on a cash basis but rose 2.3% on a GAAP basis.
During the July-September period, Digital Realty completed its prior-announced acquisition of a majority stake in Teraco for approximately $1.7 billion. Teraco is a leading carrier-neutral data center and interconnection services provider in South Africa.
During the quarter, Digital Realty disposed of a non-core, mixed-use data center property in Dallas, TX for $207 million.
Balance Sheet
Digital Realty exited the third quarter of 2022 with cash and cash equivalents of $176.97 million, up from the $99.2 million recorded at the end of the second quarter of 2022.
As of Sep 30, 2022, this data center REIT had $15.8 billion of total debt outstanding, of which $15.3 billion was unsecured debt and $0.5 billion was secured debt. As of the same date, its net debt-to-adjusted EBITDA was 6.7X, while fixed charge coverage was 5.5X.
Guidance
Digital Realty revised its 2022 outlook.
Core FFO per share is expected in the range of $6.70-$6.75, revised from the earlier guidance of $6.75-$6.85. The Zacks Consensus Estimate for the same is currently pegged at $6.77.
DLR projects total revenues in the band of $4.65-$4.70 billion compared with the prior guidance in the band of $4.65-$4.75 billion. Adjusted EBITDA is projected in the range of $2.45-$2.475 billion compared with the $2.45-$2.50 billion range guided earlier.
This data center REIT projects rental rates on renewal leases to be slightly positive on a cash basis and rise in the low single digits on a GAAP basis.
The year-end portfolio occupancy is expected to be 83.5-84.0% compared with the 83.0-84.0% projected earlier. Same-capital cash NOI is estimated to decline 4.5-5.5% compared with the prior projection of a decline of 3.5-4.5%.
Prologis, Inc. (PLD - Free Report) reported third-quarter 2022 core FFO per share of $1.73, which beat the Zacks Consensus Estimate. The figure jumped a whopping 66.4% from the year-ago quarter’s $1.04. PLD's results reflected healthy leasing activity with solid rent growth. The bottom line also improved.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported third-quarter 2022 adjusted FFO per share of $2.13, surpassing the Zacks Consensus Estimate by a cent. The reported figure also compared favorably with the year-ago quarter’s $1.95. ARE's results reflected decent leasing activity and rental rate growth during the quarter.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Digital Realty (DLR) Meets Q3 FFO Estimates, Lowers View
Digital Realty Trust (DLR - Free Report) delivered third-quarter 2022 core funds from operations (FFO) per share of $1.67, up from the $1.65 reported in the year-ago period. The figure also matched the Zacks Consensus Estimate.
The company registered operating revenues of $1.19 billion in the third quarter, marking a 5.2% year-over-year increase. Operating revenues outpaced the Zacks Consensus Estimate by just 0.3%.
Adjusted EBITDA of $620 million in the quarter marked a 2% increase year over year.
Per Digital Realty’s CEO, Bill Stein, "Digital Realty again delivered record quarterly bookings in the third quarter, our third record in the past four quarters, reflecting the strong global demand for data center solutions."
Quarter in Detail
In the reported quarter, signed total bookings were estimated to generate $176 million of annualized GAAP rental revenues, including the $13-million contribution from interconnection, excluding any contribution from Teraco. The weighted-average lag between the new leases signed in the third quarter and the contractual commencement date was 17 months.
Digital Realty signed renewal leases, marking $156 million of annualized GAAP rental revenues during the September-end quarter, excluding any contribution from Teraco. Rental rates on renewal leases signed during the quarter rolled down 0.5% on a cash basis but rose 2.3% on a GAAP basis.
During the July-September period, Digital Realty completed its prior-announced acquisition of a majority stake in Teraco for approximately $1.7 billion. Teraco is a leading carrier-neutral data center and interconnection services provider in South Africa.
During the quarter, Digital Realty disposed of a non-core, mixed-use data center property in Dallas, TX for $207 million.
Balance Sheet
Digital Realty exited the third quarter of 2022 with cash and cash equivalents of $176.97 million, up from the $99.2 million recorded at the end of the second quarter of 2022.
As of Sep 30, 2022, this data center REIT had $15.8 billion of total debt outstanding, of which $15.3 billion was unsecured debt and $0.5 billion was secured debt. As of the same date, its net debt-to-adjusted EBITDA was 6.7X, while fixed charge coverage was 5.5X.
Guidance
Digital Realty revised its 2022 outlook.
Core FFO per share is expected in the range of $6.70-$6.75, revised from the earlier guidance of $6.75-$6.85. The Zacks Consensus Estimate for the same is currently pegged at $6.77.
DLR projects total revenues in the band of $4.65-$4.70 billion compared with the prior guidance in the band of $4.65-$4.75 billion. Adjusted EBITDA is projected in the range of $2.45-$2.475 billion compared with the $2.45-$2.50 billion range guided earlier.
This data center REIT projects rental rates on renewal leases to be slightly positive on a cash basis and rise in the low single digits on a GAAP basis.
The year-end portfolio occupancy is expected to be 83.5-84.0% compared with the 83.0-84.0% projected earlier. Same-capital cash NOI is estimated to decline 4.5-5.5% compared with the prior projection of a decline of 3.5-4.5%.
Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Digital Realty Trust, Inc. Price, Consensus and EPS Surprise
Digital Realty Trust, Inc. price-consensus-eps-surprise-chart | Digital Realty Trust, Inc. Quote
Performance of Notable REITs
Prologis, Inc. (PLD - Free Report) reported third-quarter 2022 core FFO per share of $1.73, which beat the Zacks Consensus Estimate. The figure jumped a whopping 66.4% from the year-ago quarter’s $1.04. PLD's results reflected healthy leasing activity with solid rent growth. The bottom line also improved.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported third-quarter 2022 adjusted FFO per share of $2.13, surpassing the Zacks Consensus Estimate by a cent. The reported figure also compared favorably with the year-ago quarter’s $1.95. ARE's results reflected decent leasing activity and rental rate growth during the quarter.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.