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Simon Property (SPG) Q2 FFO Beats on Healthy NOI Growth
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Simon Property Group, Inc. (SPG - Free Report) , a retail real estate investment trust (REIT), reported second-quarter 2018 funds from operations (FFO) of $2.98 per share, which surpassed the Zacks Consensus Estimate of $2.91. The FFO per share figure also came in 20.6% higher than the year-ago tally of $2.47.
Results highlight increase in base minimum rent per square foot and leasing spread per square foot at its U.S. malls and Premium Outlets. Simon Property also raised its outlook for 2018.
During the reported quarter, the company posted revenues of around $1.39 billion, which outpaced the Zacks Consensus Estimate of $1.38 billion. The revenue figure also compares favorably with the year-ago number of $1.36 billion.
Simon Property Group, Inc. Price, Consensus and EPS Surprise
For the U.S. Malls and Premium Outlets portfolio, occupancy was 94.7% as of Jun 30, 2018, expanding 10 basis points (bps) from the prior-quarter tally. Retailer sales per square foot came in at $646 for the trailing 12-month period, marking growth of 4.6%. Base minimum rent per square feet rose 3.3% year over year to $53.84 as of Jun 30, 2018. Further, leasing spread per square foot for the trailing 12-month period ended Jun 30, 2018, increased 10.7% to $7.32.
Total portfolio net operating income (NOI) growth for the six-month period ended Jun 30, 2018, came in at 4.5%. Comparable-property NOI growth for the same period came in at 2.3%.
At the end of the reported quarter, Simon Property had redevelopment and expansion projects, including the addition of new anchors, in progress at properties across the United States, Canada, Europe and Asia.
The company exited second-quarter 2018 with cash and cash equivalents of $714.2 million compared with nearly $1.5 billion reported at end of December 2017.
Additionally, as of Jun 30, 2018, Simon had more than $7 billion of liquidity. This comprised cash on hand, including available capacity under the company’s revolving credit facilities and its share of joint-venture cash.
In addition, the company repurchased 514,659 shares of its common stock during the June-end quarter.
Outlook
Simon Property raised its outlook for 2018. The company, now, projects FFO per share of $12.05-$12.13 as compared to the prior guidance of $11.95-$12.05. The Zacks Consensus Estimate for the same is currently pegged at $12.03.
Dividend Update
Simon Property announced a quarterly dividend of $2 per share, denoting an increase of 11.1% year over year. The dividend will be paid on Aug 31, to stockholders of record on Aug 17, 2018.
Our Viewpoint
Simon Property has a diversified exposure to retail assets in the United States and abroad. The company has a strong and improving balance sheet. Furthermore, the company is focusing on overhauling its properties and increasingly adopting omni-channel strategies. In fact, recently, Simon Property announced substantial redevelopment program at five properties. This move will help the retail REIT transform the former Sears stores and draw more traffic to these malls, in order to benefit the existing retailers.
Admittedly, Simon Property is putting in every effort to enhance the value of its assets. Nonetheless, the implementation of such measures requires a decent upfront cost and therefore, may limit any robust growth in its near-term profit margins. Also, rate hike has added to its woes.
We now look forward to the earnings releases of other REITs like The Macerich Company (MAC - Free Report) , Federal Realty Trust (FRT - Free Report) and Mark Cali Realty . All three companies are scheduled to report their Q2 numbers on Aug 1, 2018.
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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Simon Property (SPG) Q2 FFO Beats on Healthy NOI Growth
Simon Property Group, Inc. (SPG - Free Report) , a retail real estate investment trust (REIT), reported second-quarter 2018 funds from operations (FFO) of $2.98 per share, which surpassed the Zacks Consensus Estimate of $2.91. The FFO per share figure also came in 20.6% higher than the year-ago tally of $2.47.
Results highlight increase in base minimum rent per square foot and leasing spread per square foot at its U.S. malls and Premium Outlets. Simon Property also raised its outlook for 2018.
During the reported quarter, the company posted revenues of around $1.39 billion, which outpaced the Zacks Consensus Estimate of $1.38 billion. The revenue figure also compares favorably with the year-ago number of $1.36 billion.
Simon Property Group, Inc. Price, Consensus and EPS Surprise
Simon Property Group, Inc. Price, Consensus and EPS Surprise | Simon Property Group, Inc. Quote
Inside the Headline Numbers
For the U.S. Malls and Premium Outlets portfolio, occupancy was 94.7% as of Jun 30, 2018, expanding 10 basis points (bps) from the prior-quarter tally. Retailer sales per square foot came in at $646 for the trailing 12-month period, marking growth of 4.6%. Base minimum rent per square feet rose 3.3% year over year to $53.84 as of Jun 30, 2018. Further, leasing spread per square foot for the trailing 12-month period ended Jun 30, 2018, increased 10.7% to $7.32.
Total portfolio net operating income (NOI) growth for the six-month period ended Jun 30, 2018, came in at 4.5%. Comparable-property NOI growth for the same period came in at 2.3%.
At the end of the reported quarter, Simon Property had redevelopment and expansion projects, including the addition of new anchors, in progress at properties across the United States, Canada, Europe and Asia.
The company exited second-quarter 2018 with cash and cash equivalents of $714.2 million compared with nearly $1.5 billion reported at end of December 2017.
Additionally, as of Jun 30, 2018, Simon had more than $7 billion of liquidity. This comprised cash on hand, including available capacity under the company’s revolving credit facilities and its share of joint-venture cash.
In addition, the company repurchased 514,659 shares of its common stock during the June-end quarter.
Outlook
Simon Property raised its outlook for 2018. The company, now, projects FFO per share of $12.05-$12.13 as compared to the prior guidance of $11.95-$12.05. The Zacks Consensus Estimate for the same is currently pegged at $12.03.
Dividend Update
Simon Property announced a quarterly dividend of $2 per share, denoting an increase of 11.1% year over year. The dividend will be paid on Aug 31, to stockholders of record on Aug 17, 2018.
Our Viewpoint
Simon Property has a diversified exposure to retail assets in the United States and abroad. The company has a strong and improving balance sheet. Furthermore, the company is focusing on overhauling its properties and increasingly adopting omni-channel strategies. In fact, recently, Simon Property announced substantial redevelopment program at five properties. This move will help the retail REIT transform the former Sears stores and draw more traffic to these malls, in order to benefit the existing retailers.
Admittedly, Simon Property is putting in every effort to enhance the value of its assets. Nonetheless, the implementation of such measures requires a decent upfront cost and therefore, may limit any robust growth in its near-term profit margins. Also, rate hike has added to its woes.
Currently, Simon Property carries 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 The Macerich Company (MAC - Free Report) , Federal Realty Trust (FRT - Free Report) and Mark Cali Realty . All three companies are scheduled to report their Q2 numbers on Aug 1, 2018.
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.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>