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Aimco's (AIV) Q1 FFO In Line With Estimates, Revenues Beat
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Apartment Investment and Management Company (AIV - Free Report) , better known as Aimco, reported first-quarter 2018 pro forma funds from operations (FFO) of 60 cents per share, in line with the Zacks Consensus Estimate. The figure indicates a 3% increase from the year-ago quarter tally of 58 cents.
Results displayed 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 lower NOI from apartment sales in 2017 and 2018.
In the reported quarter, total revenues of $247.7 million comfortably outpaced the Zacks Consensus Estimate of $243.7 million. In addition, the reported figure came in marginally higher than the prior-year quarter tally of $246.5 million.
Quarter in Detail
Same-store revenues (before utility reimbursements) increased 2.6% year over year to $144.9 million while expenses (net of utility reimbursements) increased 2.1% from the prior-year quarter to $38.9 million. Consequently, same-store NOI climbed 2.7% to $106 million on a year-over-year basis.
Same-store average daily occupancy expanded 30 basis point (bps) year over year to 96.3%. Rental rates on new leases were up 0.4% whereas rental rates on renewal leases were up 4.9% from the expiring lease rates.
As of Mar 31, 2018, Aimco had cash and restricted cash on hand of $91 million. Moreover, the estimated fair market value of the company’s unencumbered apartment communities was around $2 billion.
Further, at the end of the quarter under review, Aimco’s outstanding borrowings on its revolving credit facility were $79 million and available capacity was $509 million, after considering $12 million of letters of credit, backed by the facility.
Portfolio Activity
During the reported quarter, Aimco invested $47 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 revenues per apartment home by 7% to $2,052. Additionally, it enhanced the quality and expected growth rate of its portfolio. Specifically, the percentage of A, B and C+ home was 49%, 35% and 16%, respectively, in first-quarter 2018 compared with 51%, 35% and 14% recorded in the year-ago quarter.
Guidance
For full-year 2018, the company updated its pro forma FFO per share guidance to $2.39-$2.49 from $2.42-$2.52 provided earlier. The Zacks Consensus Estimate for the same is $2.48.
For second-quarter 2018, Aimco provided pro forma FFO per share guidance 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 in the range of 2.10-3.10%.
Dividend
On May 2, Aimco announced a quarterly cash dividend of 38 cents per share of Class A Common Stock for the first quarter. This marks a 6% year-over-year increase. The dividend will be paid on May 31 to stockholders of record as of May 18, 2018.
Bottom Line
Aimco’s efforts to reposition its portfolio by shedding non-strategic properties and investing the proceeds in opportunistic acquisitions are likely to 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, the dilutive impact on earnings from such asset dispositions cannot be bypassed in the near term. Also, new supply in various markets is anticipated to dampen the company’s rent growth and new lease pricing ability. Hike in interest rate adds to its woes.
Apartment Investment and Management Company Price, Consensus and EPS Surprise
Here are a few other REIT companies that have reported first-quarter 2018 results recently.
HCP Inc. (HCP - Free Report) reported first-quarter 2018 FFO as adjusted of 48 cents per share, beating the Zacks Consensus Estimate of 46 cents. Comparable FFO as adjusted in the prior-year quarter was 51 cents.
Vornado Realty Trust (VNO - Free Report) reported first-quarter 2018 adjusted FFO per share with assumed conversions of 91 cents, beating the Zacks Consensus Estimate of 89 cents. Further, the figure surpassed the prior-year quarter tally of 84 cents.
Residential REIT, Essex Property Trust Inc. (ESS - Free Report) delivered first-quarter 2018 core FFO per share of $3.09, beating the Zacks Consensus Estimate of $3.05. Core FFO per share improved 5.1% from the year-ago quarter figure of $2.94.
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) Q1 FFO In Line With Estimates, Revenues Beat
Apartment Investment and Management Company (AIV - Free Report) , better known as Aimco, reported first-quarter 2018 pro forma funds from operations (FFO) of 60 cents per share, in line with the Zacks Consensus Estimate. The figure indicates a 3% increase from the year-ago quarter tally of 58 cents.
Results displayed 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 lower NOI from apartment sales in 2017 and 2018.
In the reported quarter, total revenues of $247.7 million comfortably outpaced the Zacks Consensus Estimate of $243.7 million. In addition, the reported figure came in marginally higher than the prior-year quarter tally of $246.5 million.
Quarter in Detail
Same-store revenues (before utility reimbursements) increased 2.6% year over year to $144.9 million while expenses (net of utility reimbursements) increased 2.1% from the prior-year quarter to $38.9 million. Consequently, same-store NOI climbed 2.7% to $106 million on a year-over-year basis.
Same-store average daily occupancy expanded 30 basis point (bps) year over year to 96.3%. Rental rates on new leases were up 0.4% whereas rental rates on renewal leases were up 4.9% from the expiring lease rates.
As of Mar 31, 2018, Aimco had cash and restricted cash on hand of $91 million. Moreover, the estimated fair market value of the company’s unencumbered apartment communities was around $2 billion.
Further, at the end of the quarter under review, Aimco’s outstanding borrowings on its revolving credit facility were $79 million and available capacity was $509 million, after considering $12 million of letters of credit, backed by the facility.
Portfolio Activity
During the reported quarter, Aimco invested $47 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 revenues per apartment home by 7% to $2,052. Additionally, it enhanced the quality and expected growth rate of its portfolio. Specifically, the percentage of A, B and C+ home was 49%, 35% and 16%, respectively, in first-quarter 2018 compared with 51%, 35% and 14% recorded in the year-ago quarter.
Guidance
For full-year 2018, the company updated its pro forma FFO per share guidance to $2.39-$2.49 from $2.42-$2.52 provided earlier. The Zacks Consensus Estimate for the same is $2.48.
For second-quarter 2018, Aimco provided pro forma FFO per share guidance 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 in the range of 2.10-3.10%.
Dividend
On May 2, Aimco announced a quarterly cash dividend of 38 cents per share of Class A Common Stock for the first quarter. This marks a 6% year-over-year increase. The dividend will be paid on May 31 to stockholders of record as of May 18, 2018.
Bottom Line
Aimco’s efforts to reposition its portfolio by shedding non-strategic properties and investing the proceeds in opportunistic acquisitions are likely to 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, the dilutive impact on earnings from such asset dispositions cannot be bypassed in the near term. Also, new supply in various markets is anticipated to dampen the company’s rent growth and new lease pricing ability. Hike in interest rate adds to its woes.
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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other REITs
Here are a few other REIT companies that have reported first-quarter 2018 results recently.
HCP Inc. (HCP - Free Report) reported first-quarter 2018 FFO as adjusted of 48 cents per share, beating the Zacks Consensus Estimate of 46 cents. Comparable FFO as adjusted in the prior-year quarter was 51 cents.
Vornado Realty Trust (VNO - Free Report) reported first-quarter 2018 adjusted FFO per share with assumed conversions of 91 cents, beating the Zacks Consensus Estimate of 89 cents. Further, the figure surpassed the prior-year quarter tally of 84 cents.
Residential REIT, Essex Property Trust Inc. (ESS - Free Report) delivered first-quarter 2018 core FFO per share of $3.09, beating the Zacks Consensus Estimate of $3.05. Core FFO per share improved 5.1% from the year-ago quarter figure of $2.94.
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.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>