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Aimco's (AIV) Q4 FFO and Revenues In Line With Estimates
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Apartment Investment and Management Company (AIV - Free Report) , better known as Aimco, reported fourth-quarter 2017 pro forma funds from operations (FFO) of 63 cents per share in line with the Zacks Consensus Estimate. The figure indicates a 5% increase from the year-ago quarter tally of 60 cents.
For full-year 2017, pro forma FFO per share came in at $2.45 per share, in line with the Zacks Consensus Estimate. The bottom-line figure for full-year 2016 was $2.32 per share.
Results display growth in property net operating income (NOI) supported by same-store properties, and lease-up of redevelopment and acquisition communities. However, these positives were partially offset by the loss of income from apartment sales in 2016.
For the reported quarter, total revenues of $255.2 million comfortably outpaced the Zacks Consensus Estimate of $249.8 million. In addition, the reported figure came in 2.3% higher than the prior-year quarter tally of $249.5 million.
For full-year 2017, total revenues came in at $1.01 billion, exceeding the prior-year figure by about 1%. It also surpassed the Zacks Consensus Estimate of $988.6 million.
Quarter in Detail
Same-store revenues increased 2.8% year over year to $148.4 million, while expenses increased 2.1% from the prior-year quarter to $40.4 million. Consequently, same-store net operating income (NOI) climbed 3.1% to $108 million on a year-over-year basis.
Same-store average daily occupancy expanded 20 basis point (bps) year over year to 96.3%. Rental rates on new leases were down 0.8% whereas rental rates on renewal leases were up 4.5% from the expiring lease rates.
As of Dec 31, 2017, Aimco held cash and restricted cash on hand of $95 million. Moreover, the estimated fair market value of the company’s unencumbered apartment communities came in at around $1.8 billion.
Further, at the end of the quarter, Aimco’s outstanding borrowings on its revolving credit facility were $67 million and available capacity was $521 million, after considering $12 million of letters of credit backed by the facility.
Portfolio Activity
During the reported quarter, Aimco invested $51 million in redevelopment and development.
In addition, Aimco is revamping its portfolio through property sales and reinvesting the proceeds in select apartment homes with higher rents, superior margins and higher-than-expected growth.
Through these efforts, the company increased its revenue per apartment home by 7% to $2,123. Additionally, it enhanced the quality and expected growth rate of its portfolio. Specifically, the percentage of A, B and C+ home came in at 53%, 32% and 15% in fourth-quarter 2017 compared with 51%, 36% and 13%, respectively, recorded in the year-ago quarter.
Guidance
For full-year 2018, the company expects its pro forma FFO per share guidance in the range of $2.42-$2.52. The Zacks Consensus Estimate for the same is $2.54. Notably, management has excluded legal costs relating to the case filed against Airbnb from this guidance because of the unpredictable nature of the costs.
For first-quarter 2018, Aimco provided pro forma FFO per share guidance in the band of 57- 61 cents. The Zacks Consensus Estimate for the same is 62 cents.
The company projects same-store NOI growth to be in the range of 1.70-3.10% and revenue growth to be in the range of 2.10-3.10%. Further, management expects average daily occupancy to rise 10 bps from the figure of 96.3% recorded in 2017.
Dividend
On Jan 31, Aimco announced a quarterly cash dividend of 38 cents per share of Class A Common Stock for the fourth quarter. This marks a 6% year-over-year increase. The dividend will be paid on Feb 28 to stockholders of record as of Feb 16, 2018.
Bottom Line
Aimco’s efforts to reposition its portfolio by shedding non-strategic properties and investing the proceeds in opportunistic acquisitions will likely drive long-term growth. In addition to this, the company has a solid portfolio diversified both in terms of geography and price point. This is likely to help meet the rise in demand for apartment properties efficiently.
However, stiff competition from new supply in various markets is expected to dampen Aimco’s rent growth and new lease pricing ability. Additionally, interest rate hike and dilutive effect of sale of assets remain concerns.
Apartment Investment and Management Company Price, Consensus and EPS Surprise
We now look forward to the fourth-quarter earnings releases of some other companies like EPR Properties (EPR - Free Report) , Lamar Advertising Company (LAMR - Free Report) and Outfront Media Inc. (OUT - Free Report) . EPR Properties is scheduled to announce results on Feb 28 while Lamar Advertising Company and Outfront Media are slated to report on Feb 27.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Aimco's (AIV) Q4 FFO and Revenues In Line With Estimates
Apartment Investment and Management Company (AIV - Free Report) , better known as Aimco, reported fourth-quarter 2017 pro forma funds from operations (FFO) of 63 cents per share in line with the Zacks Consensus Estimate. The figure indicates a 5% increase from the year-ago quarter tally of 60 cents.
For full-year 2017, pro forma FFO per share came in at $2.45 per share, in line with the Zacks Consensus Estimate. The bottom-line figure for full-year 2016 was $2.32 per share.
Results display growth in property net operating income (NOI) supported by same-store properties, and lease-up of redevelopment and acquisition communities. However, these positives were partially offset by the loss of income from apartment sales in 2016.
For the reported quarter, total revenues of $255.2 million comfortably outpaced the Zacks Consensus Estimate of $249.8 million. In addition, the reported figure came in 2.3% higher than the prior-year quarter tally of $249.5 million.
For full-year 2017, total revenues came in at $1.01 billion, exceeding the prior-year figure by about 1%. It also surpassed the Zacks Consensus Estimate of $988.6 million.
Quarter in Detail
Same-store revenues increased 2.8% year over year to $148.4 million, while expenses increased 2.1% from the prior-year quarter to $40.4 million. Consequently, same-store net operating income (NOI) climbed 3.1% to $108 million on a year-over-year basis.
Same-store average daily occupancy expanded 20 basis point (bps) year over year to 96.3%. Rental rates on new leases were down 0.8% whereas rental rates on renewal leases were up 4.5% from the expiring lease rates.
As of Dec 31, 2017, Aimco held cash and restricted cash on hand of $95 million. Moreover, the estimated fair market value of the company’s unencumbered apartment communities came in at around $1.8 billion.
Further, at the end of the quarter, Aimco’s outstanding borrowings on its revolving credit facility were $67 million and available capacity was $521 million, after considering $12 million of letters of credit backed by the facility.
Portfolio Activity
During the reported quarter, Aimco invested $51 million in redevelopment and development.
In addition, Aimco is revamping its portfolio through property sales and reinvesting the proceeds in select apartment homes with higher rents, superior margins and higher-than-expected growth.
Through these efforts, the company increased its revenue per apartment home by 7% to $2,123. Additionally, it enhanced the quality and expected growth rate of its portfolio. Specifically, the percentage of A, B and C+ home came in at 53%, 32% and 15% in fourth-quarter 2017 compared with 51%, 36% and 13%, respectively, recorded in the year-ago quarter.
Guidance
For full-year 2018, the company expects its pro forma FFO per share guidance in the range of $2.42-$2.52. The Zacks Consensus Estimate for the same is $2.54. Notably, management has excluded legal costs relating to the case filed against Airbnb from this guidance because of the unpredictable nature of the costs.
For first-quarter 2018, Aimco provided pro forma FFO per share guidance in the band of 57- 61 cents. The Zacks Consensus Estimate for the same is 62 cents.
The company projects same-store NOI growth to be in the range of 1.70-3.10% and revenue growth to be in the range of 2.10-3.10%. Further, management expects average daily occupancy to rise 10 bps from the figure of 96.3% recorded in 2017.
Dividend
On Jan 31, Aimco announced a quarterly cash dividend of 38 cents per share of Class A Common Stock for the fourth quarter. This marks a 6% year-over-year increase. The dividend will be paid on Feb 28 to stockholders of record as of Feb 16, 2018.
Bottom Line
Aimco’s efforts to reposition its portfolio by shedding non-strategic properties and investing the proceeds in opportunistic acquisitions will likely drive long-term growth. In addition to this, the company has a solid portfolio diversified both in terms of geography and price point. This is likely to help meet the rise in demand for apartment properties efficiently.
However, stiff competition from new supply in various markets is expected to dampen Aimco’s rent growth and new lease pricing ability. Additionally, interest rate hike and dilutive effect of sale of assets remain concerns.
Apartment Investment and Management Company Price, Consensus and EPS Surprise
Apartment Investment and Management Company Price, Consensus and EPS Surprise | Apartment Investment and Management Company Quote
Aimco currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
We now look forward to the fourth-quarter earnings releases of some other companies like EPR Properties (EPR - Free Report) , Lamar Advertising Company (LAMR - Free Report) and Outfront Media Inc. (OUT - Free Report) . EPR Properties is scheduled to announce results on Feb 28 while Lamar Advertising Company and Outfront Media are slated to report on Feb 27.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
Click here to access these stocks >>