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UDR Inc (UDR) Q2 FFO Meets Estimates, Stock Trades Down
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UDR Inc. (UDR - Free Report) reported second-quarter 2016 funds from operations (“FFO”) of 44 cents per share, which came in line with the Zacks Consensus Estimate. The figure was up 7.3% from the prior-year quarter tally of 41 cents. The improvement was driven by growth in same-store revenue and net operating income (“NOI”). The company has narrowed its full-year 2016 guidance.
Shares are trading down nearly 2.5% today.
Total revenue for this residential real estate investment trust (“REIT”) improved 10.6% year over year to $238.8 million. The figure also exceeded the Zacks Consensus Estimate of $236.7 million.
Inside the Headlines
During the quarter, same-store revenues increased 5.7% year over year; while same-store expense climbed 5.5%. Consequently, same-store NOI rose 5.7% year over year; whereas same-store physical occupancy inched down 30 basis points (bps) year over year to 96.6%. Moreover, the annualized rate of turnover went up 80 bps year over year to 56.8%.
At the end of the second quarter, UDR had a completed and under-construction development pipeline for which its pro rata share amounted to $1.1 billion. This included $162 million completed, non-stabilized project and $937 million of under-construction projects.
As of Jun 30, 2016, the company had $876 million available, through a combination of cash and undrawn capacity on its credit facilities compared with $1.1 billion as of Mar 31, 2016. Further, the company had total debt of $3.5 billion against $3.4 billion at prior-quarter end.
Guidance 2016
UDR has narrowed its FFO per share guidance for full-year 2016. The company expects FFO per share in the range of $1.76–$1.80 against $1.75–$1.81 guided earlier. The Zacks Consensus Estimate for FFO per share is currently pegged at $1.78. Also, the company projects growth in revenues, rise in expense and higher NOI in the respective ranges of 5.5–6%, 3–3.5% and 6.5–7%, for the full year.
For third-quarter 2016, UDR expects FFO per share in the 44–46 cents range. The Zacks Consensus Estimate for the third quarter currently stands at 45 cents.
UDR is expected to benefit from improving U.S. apartment fundamentals, its efforts to enhance the overall portfolio quality, disciplined capital allocation and a strong balance sheet position. Yet, operational risks associated with construction activities, stiff competition from other housing alternatives and any rise in interest rate are concerns.
Currently UDR has a Zacks Rank #3 (Hold).
We now look forward to the earnings releases of the other residential REITs – Camden Property Trust (CPT - Free Report) , Essex Property Trust Inc. (ESS - Free Report) and Apartment Investment and Management Company (AIV - Free Report) – which are scheduled to report this week itself.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. All EPS numbers presented in this write up represent FFO per share.
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UDR Inc (UDR) Q2 FFO Meets Estimates, Stock Trades Down
UDR Inc. (UDR - Free Report) reported second-quarter 2016 funds from operations (“FFO”) of 44 cents per share, which came in line with the Zacks Consensus Estimate. The figure was up 7.3% from the prior-year quarter tally of 41 cents. The improvement was driven by growth in same-store revenue and net operating income (“NOI”). The company has narrowed its full-year 2016 guidance.
Shares are trading down nearly 2.5% today.
Total revenue for this residential real estate investment trust (“REIT”) improved 10.6% year over year to $238.8 million. The figure also exceeded the Zacks Consensus Estimate of $236.7 million.
Inside the Headlines
During the quarter, same-store revenues increased 5.7% year over year; while same-store expense climbed 5.5%. Consequently, same-store NOI rose 5.7% year over year; whereas same-store physical occupancy inched down 30 basis points (bps) year over year to 96.6%. Moreover, the annualized rate of turnover went up 80 bps year over year to 56.8%.
At the end of the second quarter, UDR had a completed and under-construction development pipeline for which its pro rata share amounted to $1.1 billion. This included $162 million completed, non-stabilized project and $937 million of under-construction projects.
As of Jun 30, 2016, the company had $876 million available, through a combination of cash and undrawn capacity on its credit facilities compared with $1.1 billion as of Mar 31, 2016. Further, the company had total debt of $3.5 billion against $3.4 billion at prior-quarter end.
Guidance 2016
UDR has narrowed its FFO per share guidance for full-year 2016. The company expects FFO per share in the range of $1.76–$1.80 against $1.75–$1.81 guided earlier. The Zacks Consensus Estimate for FFO per share is currently pegged at $1.78. Also, the company projects growth in revenues, rise in expense and higher NOI in the respective ranges of 5.5–6%, 3–3.5% and 6.5–7%, for the full year.
For third-quarter 2016, UDR expects FFO per share in the 44–46 cents range. The Zacks Consensus Estimate for the third quarter currently stands at 45 cents.
UDR INC Price, Consensus and EPS Surprise
UDR INC Price, Consensus and EPS Surprise | UDR INC Quote
Our Viewpoint
UDR is expected to benefit from improving U.S. apartment fundamentals, its efforts to enhance the overall portfolio quality, disciplined capital allocation and a strong balance sheet position. Yet, operational risks associated with construction activities, stiff competition from other housing alternatives and any rise in interest rate are concerns.
Currently UDR has a Zacks Rank #3 (Hold).
We now look forward to the earnings releases of the other residential REITs – Camden Property Trust (CPT - Free Report) , Essex Property Trust Inc. (ESS - Free Report) and Apartment Investment and Management Company (AIV - Free Report) – which are scheduled to report this week itself.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. All EPS numbers presented in this write up represent FFO per share.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>