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UDR Q4 FFO In Line With Expectations, Revenues Increase
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Residential REIT, UDR Inc. (UDR - Free Report) reported funds from operations (FFO) as adjusted per share of 48 cents for fourth-quarter 2017, matching the Zacks Consensus Estimate. The figure also came higher than the prior-year quarter tally of 46 cents.
For full-year 2017, FFO as adjusted per share came in at $1.87 per share, up 4.5% from the 2016 figure. Also, it surpassed full-year Zacks Consensus Estimate for FFO of $1.86.
Total revenues for the quarter rose 4.1% year over year to $252.9 million. Further, the top line came above the Zacks Consensus Estimate of $251.4 million. For full-year 2017, revenues came in at $995.8 million, up 3.7% from the year-ago figure. It also surpassed the full-year Zacks Consensus Estimate of $988.1 million. Growth in revenues for the quarter and the year was due to the rise in revenue from same-store communities and stabilized, non-mature communities.
Inside the Headlines
During the quarter, same-store revenues increased 3.1% year over year while same-store expenses increased 2.9%. Consequently, same-store net operating income (NOI) rose 3.1% year over year. However, the company’s same-store physical occupancy remained flat at 96.8%. The fourth-quarter annualized-rate of turnover contracted 40 basis points from the prior-year period to 41.2%.
At the end of the fourth quarter, UDR’s development pipeline aggregated $864.5 million at its pro-rata ownership interest. This included $54 million of completed, non-stabilized projects and $810.5 million of under-construction developments.
As of Dec 31, 2017, the company had around $855.3 million available from a combination of cash and undrawn capacity on its credit facilities. Further, the company’s total debt was $3.7 billion as of the same date.
Portfolio Activity
At the end of the fourth quarter, the company’s Developer Capital Program investment, including accrued return, totaled $158.9 million.
Guidance
For first-quarter 2018, UDR projects FFO as adjusted per share in the 46-48 cents range. The Zacks Consensus Estimate of 48 cents lies within this guidance.
For full-year 2018, the company projects FFO as adjusted per share of $1.91-$1.95. However, the Zacks Consensus Estimate of $1.96 does not lie within this range. Moreover, the company anticipates same-store revenues, expenses and same-store NOI to remain in the range of 2.5-3.5% for the year.
Our Viewpoint
UDR’s portfolio with superior product-mix, located in the targeted U.S. markets, is likely to drive long-term growth in rental income. Further, increasing demand for apartments and the company’s concentration on enhancing portfolio via expansion in core markets and sale of non-core ones is expected to support momentum.
However, the company continues to deal with an elevated level of apartment supply in a number of its markets. Moreover, any rise in interest rates remains a concern for the company.
United Dominion Realty Trust, Inc. Price, Consensus and EPS Surprise
We now look forward to the earnings releases of other REITs like Taubman Centers, Inc. , Regency Centers Corporation (REG - Free Report) and HCP Inc. (HCP - Free Report) . Taubman Centers and Regency Centers are scheduled to release results on Feb 8, while HCP is slated to report its numbers on Feb 13.
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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UDR Q4 FFO In Line With Expectations, Revenues Increase
Residential REIT, UDR Inc. (UDR - Free Report) reported funds from operations (FFO) as adjusted per share of 48 cents for fourth-quarter 2017, matching the Zacks Consensus Estimate. The figure also came higher than the prior-year quarter tally of 46 cents.
For full-year 2017, FFO as adjusted per share came in at $1.87 per share, up 4.5% from the 2016 figure. Also, it surpassed full-year Zacks Consensus Estimate for FFO of $1.86.
Total revenues for the quarter rose 4.1% year over year to $252.9 million. Further, the top line came above the Zacks Consensus Estimate of $251.4 million. For full-year 2017, revenues came in at $995.8 million, up 3.7% from the year-ago figure. It also surpassed the full-year Zacks Consensus Estimate of $988.1 million. Growth in revenues for the quarter and the year was due to the rise in revenue from same-store communities and stabilized, non-mature communities.
Inside the Headlines
During the quarter, same-store revenues increased 3.1% year over year while same-store expenses increased 2.9%. Consequently, same-store net operating income (NOI) rose 3.1% year over year. However, the company’s same-store physical occupancy remained flat at 96.8%. The fourth-quarter annualized-rate of turnover contracted 40 basis points from the prior-year period to 41.2%.
At the end of the fourth quarter, UDR’s development pipeline aggregated $864.5 million at its pro-rata ownership interest. This included $54 million of completed, non-stabilized projects and $810.5 million of under-construction developments.
As of Dec 31, 2017, the company had around $855.3 million available from a combination of cash and undrawn capacity on its credit facilities. Further, the company’s total debt was $3.7 billion as of the same date.
Portfolio Activity
At the end of the fourth quarter, the company’s Developer Capital Program investment, including accrued return, totaled $158.9 million.
Guidance
For first-quarter 2018, UDR projects FFO as adjusted per share in the 46-48 cents range. The Zacks Consensus Estimate of 48 cents lies within this guidance.
For full-year 2018, the company projects FFO as adjusted per share of $1.91-$1.95. However, the Zacks Consensus Estimate of $1.96 does not lie within this range. Moreover, the company anticipates same-store revenues, expenses and same-store NOI to remain in the range of 2.5-3.5% for the year.
Our Viewpoint
UDR’s portfolio with superior product-mix, located in the targeted U.S. markets, is likely to drive long-term growth in rental income. Further, increasing demand for apartments and the company’s concentration on enhancing portfolio via expansion in core markets and sale of non-core ones is expected to support momentum.
However, the company continues to deal with an elevated level of apartment supply in a number of its markets. Moreover, any rise in interest rates remains a concern for the company.
United Dominion Realty Trust, Inc. Price, Consensus and EPS Surprise
United Dominion Realty Trust, Inc. Price, Consensus and EPS Surprise | United Dominion Realty Trust, Inc. Quote
Currently, UDR has 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 other REITs like Taubman Centers, Inc. , Regency Centers Corporation (REG - Free Report) and HCP Inc. (HCP - Free Report) . Taubman Centers and Regency Centers are scheduled to release results on Feb 8, while HCP is slated to report its numbers on Feb 13.
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.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>