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Liberty Property (LPT) Stock Up on Q1 FFO & Revenue Beat
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Liberty Property Trust reported first-quarter 2018 funds from operations (FFO) per share of 65 cents, which surpassed the Zacks Consensus Estimate of 62 cents. Total operating revenues of around $190.2 million for the quarter also outpaced the Zacks Consensus Estimate of $169.5 million.
On a year-over-year basis, the company’s FFO per share climbed from 60 cents per share recorded in the year-earlier quarter, while total operating revenues increased 14.7% year over year. The company also raised its guidance for 2018.
During the reported quarter, Liberty Property accomplished lease deals for 6.3 million square feet of space. As of Mar 31, 2018, occupancy at the company’s operating portfolio, spanning 101.3 million square feet, contracted 20 basis points (bps) sequentially to 96.7%.
Amid these, shares of Liberty Property inched up 1.5% to $39.80 during regular trading session on Apr 24.
Quarter in Detail
Liberty Property’s industrial portfolio, spanning 94.4 million square feet of area, enjoyed occupancy of 96.7% at the end of the first quarter, marking a contraction of 30 bps from the prior quarter. Industrial rents escalated 12.4% on retained and replacement leases commenced during the quarter.
The office portfolio, comprising 6.8 million square feet of space, had occupancy of 95.9%, up 30 bps from the previous quarter. Office rents were up 23.5% on retained and replacement leases.
Same-store operating income for the industrial portfolio jumped 7.0% on a cash and 5.0% on a GAAP basis.
Portfolio Activity
During the first quarter, Liberty acquired a 100% leased building in California, aggregating 400,000 square feet of space, for $90.9 million.
On the other hand, Liberty sold 24 properties, totaling around 1.5 million square feet of area, for $190.8 million. These were mainly office properties in sub-urban Philadelphia.
The company brought into service three wholly-owned development properties, having 519,000 square feet of leasable space and 100% occupied as of the end of the quarter, for a total investment of $85.1 million. Further, Liberty commenced development of six wholly-owned properties during the quarter, aggregating 1.7 million square feet of leasable space, at an estimated investment of $123.5 million.
Balance-Sheet Position
Liberty Property exited first-quarter 2018 with cash and cash equivalents of around $30.4 million, up from $11.9 million recorded at the end of the prior quarter.
Outlook
Liberty Property raised its outlook for 2018. The company now guides FFO per share of $2.55-$2.65 compared to its previous outlook of $2.53-$2.65. The Zacks Consensus Estimate for the same is currently pegged at $2.59.
Our Take
The better-than-expected performance of Liberty Property in the first quarter is encouraging. The company is shifting its focus toward industrial properties due to favorable demand supply conditions. Its premium quality industrial properties, situated at key locations, are likely to drive long-term growth by leveraging on the e-commerce boom and supply-chain strategy transformations. Moreover, Liberty Property plans to fund investments in industrial assets through proceeds from dispositions of office properties. However, the near-term dilution impact from asset dispositions cannot be bypassed. Also, rate hike remains a concern.
We now look forward to the earnings releases of other REITs like Taubman Centers, Inc. , Kimco Realty Corporation (KIM - Free Report) and Digital Realty Trust, Inc. (DLR - Free Report) , which are scheduled to release quarterly numbers on Apr 26.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
Liberty Property (LPT) Stock Up on Q1 FFO & Revenue Beat
Liberty Property Trust reported first-quarter 2018 funds from operations (FFO) per share of 65 cents, which surpassed the Zacks Consensus Estimate of 62 cents. Total operating revenues of around $190.2 million for the quarter also outpaced the Zacks Consensus Estimate of $169.5 million.
On a year-over-year basis, the company’s FFO per share climbed from 60 cents per share recorded in the year-earlier quarter, while total operating revenues increased 14.7% year over year. The company also raised its guidance for 2018.
During the reported quarter, Liberty Property accomplished lease deals for 6.3 million square feet of space. As of Mar 31, 2018, occupancy at the company’s operating portfolio, spanning 101.3 million square feet, contracted 20 basis points (bps) sequentially to 96.7%.
Amid these, shares of Liberty Property inched up 1.5% to $39.80 during regular trading session on Apr 24.
Quarter in Detail
Liberty Property’s industrial portfolio, spanning 94.4 million square feet of area, enjoyed occupancy of 96.7% at the end of the first quarter, marking a contraction of 30 bps from the prior quarter. Industrial rents escalated 12.4% on retained and replacement leases commenced during the quarter.
The office portfolio, comprising 6.8 million square feet of space, had occupancy of 95.9%, up 30 bps from the previous quarter. Office rents were up 23.5% on retained and replacement leases.
Same-store operating income for the industrial portfolio jumped 7.0% on a cash and 5.0% on a GAAP basis.
Portfolio Activity
During the first quarter, Liberty acquired a 100% leased building in California, aggregating 400,000 square feet of space, for $90.9 million.
On the other hand, Liberty sold 24 properties, totaling around 1.5 million square feet of area, for $190.8 million. These were mainly office properties in sub-urban Philadelphia.
The company brought into service three wholly-owned development properties, having 519,000 square feet of leasable space and 100% occupied as of the end of the quarter, for a total investment of $85.1 million. Further, Liberty commenced development of six wholly-owned properties during the quarter, aggregating 1.7 million square feet of leasable space, at an estimated investment of $123.5 million.
Balance-Sheet Position
Liberty Property exited first-quarter 2018 with cash and cash equivalents of around $30.4 million, up from $11.9 million recorded at the end of the prior quarter.
Outlook
Liberty Property raised its outlook for 2018. The company now guides FFO per share of $2.55-$2.65 compared to its previous outlook of $2.53-$2.65. The Zacks Consensus Estimate for the same is currently pegged at $2.59.
Our Take
The better-than-expected performance of Liberty Property in the first quarter is encouraging. The company is shifting its focus toward industrial properties due to favorable demand supply conditions. Its premium quality industrial properties, situated at key locations, are likely to drive long-term growth by leveraging on the e-commerce boom and supply-chain strategy transformations. Moreover, Liberty Property plans to fund investments in industrial assets through proceeds from dispositions of office properties. However, the near-term dilution impact from asset dispositions cannot be bypassed. Also, rate hike remains a concern.
Currently, Liberty Property carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Liberty Property Trust Price, Consensus and EPS Surprise
Liberty Property Trust Price, Consensus and EPS Surprise | Liberty Property Trust Quote
We now look forward to the earnings releases of other REITs like Taubman Centers, Inc. , Kimco Realty Corporation (KIM - Free Report) and Digital Realty Trust, Inc. (DLR - Free Report) , which are scheduled to release quarterly numbers on Apr 26.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>