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Highwoods (HIW) Q4 FFO In Line with Estimates, Revenues Miss
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Highwoods Properties Inc. (HIW - Free Report) reported fourth-quarter 2016 funds from operations (“FFO”) of 82 cents per share, which came in line with the Zacks Consensus Estimate. The prior-year quarter’s bottom line was also 82 cents. Results reflected strong growth in same-property net operating income (“NOI”).
For full-year 2016, FFO came in at $3.28 per share, up 6.5% from the 2015 figure. Full-year Zacks Consensus Estimate for FFO was $3.27. Total revenue for the quarter rose 5% year over year to $167.6 million. However, the top line came in below the Zacks Consensus Estimate of $169 million.
For full-year 2016, revenues came in at $6.66 billion, up 10.1% from the year-ago figure. Full-year Zacks Consensus Estimate for revenues was $6.71 billion.
Highwoods leased 726,000 square feet of second-generation office space during the quarter. Same property cash NOI rose 5.8% year over year.
The company announced the development of 751 Corporate Center in Raleigh. The project, which is 35% pre-leased to a new customer, will cover an area of 90,000 square feet. The estimated investment amount for the project is $21.9 million.
As of Dec 31, 2016, Highwoods had $49.5 million of cash and cash equivalents, up from $5 million as of Dec 31, 2015.
2017 Outlook
Highwoods expects 2017 FFO to be in the range of $3.27–$3.40 per share. The Zacks Consensus Estimate for 2017 is $3.41.
Our Viewpoint
Improving operating performance reflects bright prospects for the company. In particular, Highwoods has been focusing on shifting its portfolio mix toward high-growth Sun Belt markets, where long-term favorable demographic trends are expected to drive above-average job growth.
However, a large development pipeline exposes the company to higher construction costs, lease-up risks and entitlement delays. Moreover, increasing competition in the space restricts its ability to command relatively higher rents.
Highwoods Properties, Inc. Price, Consensus and EPS Surprise
We now look forward to the earnings releases of DDR Corp. , Vornado Realty Trust (VNO - Free Report) and HCP, Inc. (HCP - Free Report) which are expected next week.
Note: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. 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.
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Highwoods (HIW) Q4 FFO In Line with Estimates, Revenues Miss
Highwoods Properties Inc. (HIW - Free Report) reported fourth-quarter 2016 funds from operations (“FFO”) of 82 cents per share, which came in line with the Zacks Consensus Estimate. The prior-year quarter’s bottom line was also 82 cents. Results reflected strong growth in same-property net operating income (“NOI”).
For full-year 2016, FFO came in at $3.28 per share, up 6.5% from the 2015 figure. Full-year Zacks Consensus Estimate for FFO was $3.27.
Total revenue for the quarter rose 5% year over year to $167.6 million. However, the top line came in below the Zacks Consensus Estimate of $169 million.
For full-year 2016, revenues came in at $6.66 billion, up 10.1% from the year-ago figure. Full-year Zacks Consensus Estimate for revenues was $6.71 billion.
Quarter in Detail
Highwoods leased 726,000 square feet of second-generation office space during the quarter. Same property cash NOI rose 5.8% year over year.
The company announced the development of 751 Corporate Center in Raleigh. The project, which is 35% pre-leased to a new customer, will cover an area of 90,000 square feet. The estimated investment amount for the project is $21.9 million.
As of Dec 31, 2016, Highwoods had $49.5 million of cash and cash equivalents, up from $5 million as of Dec 31, 2015.
2017 Outlook
Highwoods expects 2017 FFO to be in the range of $3.27–$3.40 per share. The Zacks Consensus Estimate for 2017 is $3.41.
Our Viewpoint
Improving operating performance reflects bright prospects for the company. In particular, Highwoods has been focusing on shifting its portfolio mix toward high-growth Sun Belt markets, where long-term favorable demographic trends are expected to drive above-average job growth.
However, a large development pipeline exposes the company to higher construction costs, lease-up risks and entitlement delays. Moreover, increasing competition in the space restricts its ability to command relatively higher rents.
Highwoods Properties, Inc. Price, Consensus and EPS Surprise
Highwoods Properties, Inc. Price, Consensus and EPS Surprise | Highwoods Properties, Inc. Quote
Highwoods currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We now look forward to the earnings releases of DDR Corp. , Vornado Realty Trust (VNO - Free Report) and HCP, Inc. (HCP - Free Report) which are expected next week.
Note: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. 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.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>