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Federal Realty (FRT) Q1 FFO and Revenues Beat Estimates
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Federal Realty Investment Trust (FRT - Free Report) posted first-quarter 2017 funds from operations (“FFO”) per share of $1.45, beating the Zacks Consensus Estimate of $1.43. The figure also came higher than the prior-year quarter tally of $1.38. Results were backed by growth in revenues.
Total revenue for the quarter grew 4.6% year over year to $207.4 million. In addition, the top line exceeded the Zacks Consensus Estimate of $206.7 million.
Quarter in Details
During the reported quarter, Federal Realty signed 114 lease deals for 591,765 square feet of retail space. As of Mar 31, 2017, the company’s overall portfolio was 94.6% leased, up 50 basis points (bps) year over year.
On a comparable-space basis (spaces for which a former tenant was there), Federal Realty leased 523,869 square feet, at an average cash-basis contractual rent escalation of 11%. Rent increases (on a straight-line basis) for comparable retail space averaged 23% for first-quarter 2017.
Same-center property operating income (including redevelopments) improved 4.3% year over year. Excluding such properties, same-center property operating income grew 1%. As of Mar 31, 2017, Federal Realty’s same-center portfolio was 95.8% leased, down 10 bps year over year. Notably, the company’s proactive anchor-releasing initiatives to reposition properties continued to have an adverse effect on its same-store quarterly results.
Federal Realty exited the first quarter with cash and cash equivalents of approximately $20.1 million, down from $23.4 at the end of 2016.
Outlook 2017
For 2017, Federal Realty raised its FFO per share guidance to $5.85–$5.93 from the previous guidance of $5.83–$5.93. The Zacks Consensus Estimate for the same is currently pegged at $5.89, which lies within the company’s guided range.
Dividend Update
Federal Realty declared a quarterly cash dividend of 98 cents per share. The dividend will be paid on July 17 to shareholders on record as of Jun 22, 2017.
Our Take
We are encouraged with the better-than-expected performance of Federal Realty in the first quarter. The company’s portfolio of premium retail assets – mainly situated in the major coastal markets from Washington, D.C. to Boston, San Francisco and Los Angeles – along with a diverse tenant base, positions it well for decent growth.
However, mall traffic continues to dwindle amid a rapid shift in customers’ shopping preferences, with non-store sales rising significantly. This has become a pressing concern for retail REITs like Federal Realty. Moreover, though the anchor-repositioning strategies are a strategic fit for the long term, the short-term impacts on earnings cannot be bypassed.
We are now looking forward to the earnings releases of Welltower Inc. , Mack-Cali Realty Corporation and Regency Centers Corporation (REG - Free Report) , all of which are expected to report their quarterly figures in the upcoming days.
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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Federal Realty (FRT) Q1 FFO and Revenues Beat Estimates
Federal Realty Investment Trust (FRT - Free Report) posted first-quarter 2017 funds from operations (“FFO”) per share of $1.45, beating the Zacks Consensus Estimate of $1.43. The figure also came higher than the prior-year quarter tally of $1.38. Results were backed by growth in revenues.
Total revenue for the quarter grew 4.6% year over year to $207.4 million. In addition, the top line exceeded the Zacks Consensus Estimate of $206.7 million.
Quarter in Details
During the reported quarter, Federal Realty signed 114 lease deals for 591,765 square feet of retail space. As of Mar 31, 2017, the company’s overall portfolio was 94.6% leased, up 50 basis points (bps) year over year.
On a comparable-space basis (spaces for which a former tenant was there), Federal Realty leased 523,869 square feet, at an average cash-basis contractual rent escalation of 11%. Rent increases (on a straight-line basis) for comparable retail space averaged 23% for first-quarter 2017.
Same-center property operating income (including redevelopments) improved 4.3% year over year. Excluding such properties, same-center property operating income grew 1%. As of Mar 31, 2017, Federal Realty’s same-center portfolio was 95.8% leased, down 10 bps year over year. Notably, the company’s proactive anchor-releasing initiatives to reposition properties continued to have an adverse effect on its same-store quarterly results.
Federal Realty exited the first quarter with cash and cash equivalents of approximately $20.1 million, down from $23.4 at the end of 2016.
Outlook 2017
For 2017, Federal Realty raised its FFO per share guidance to $5.85–$5.93 from the previous guidance of $5.83–$5.93. The Zacks Consensus Estimate for the same is currently pegged at $5.89, which lies within the company’s guided range.
Dividend Update
Federal Realty declared a quarterly cash dividend of 98 cents per share. The dividend will be paid on July 17 to shareholders on record as of Jun 22, 2017.
Our Take
We are encouraged with the better-than-expected performance of Federal Realty in the first quarter. The company’s portfolio of premium retail assets – mainly situated in the major coastal markets from Washington, D.C. to Boston, San Francisco and Los Angeles – along with a diverse tenant base, positions it well for decent growth.
However, mall traffic continues to dwindle amid a rapid shift in customers’ shopping preferences, with non-store sales rising significantly. This has become a pressing concern for retail REITs like Federal Realty. Moreover, though the anchor-repositioning strategies are a strategic fit for the long term, the short-term impacts on earnings cannot be bypassed.
Currently, Federal Realty carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Federal Realty Investment Trust Price, Consensus and EPS Surprise
Federal Realty Investment Trust Price, Consensus and EPS Surprise | Federal Realty Investment Trust Quote
We are now looking forward to the earnings releases of Welltower Inc. , Mack-Cali Realty Corporation and Regency Centers Corporation (REG - Free Report) , all of which are expected to report their quarterly figures in the upcoming days.
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.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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