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Boston Properties (BXP) to Post Q4 Earnings: What's in Store?
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Boston Properties, Inc. (BXP - Free Report) is scheduled to report fourth-quarter 2018 results on Jan 29, after the market closes. The company’s results will likely reflect year-over-year growth in funds from operations (FFO) per share and a decline in the top line.
In the last reported quarter, this office real estate investment trust’s (REIT) FFO of $1.64 per share surpassed the Zacks Consensus Estimate of $1.63. Results were supported by higher revenues from development and management services.
Over the preceding four quarters, the company surpassed the FFO per share estimates in two occasions, met in the other and missed in another, the average negative surprise being 0.18%. This is depicted in the graph below:
Let’s see how things are shaping up for this announcement.
Factors to Influence Q4 Results
The U.S. office real estate market has been gaining traction on the back of economic improvement and recovery in the job market. Particularly, as the economy revives, existing business grows and therefore, corporate sectors seek expansion, renting more space to accommodate the increased workforce. Furthermore, amid healthy growth in demand for office spaces, office landlords can raise rents for properties.
Per a study by the commercial real estate services firm — CBRE Group (CBRE - Free Report) — the fourth-quarter office vacancy rate declined to its lowest level since 2011 by 10 basis points (bps) to 12.6%. Further, job growth boosted annual net absorption to 58.3 million square feet of space — the highest since 2015.
Also, Boston and San Francisco, where Boston Properties has significant presence, witnessed rent growth of 6.5% or higher. These encouraging statistics are anticipated to have driven significant leasing activity and rental revenues in the company’s markets.
Notably, in late December, it secured a lease with Millennium Management for renting more than 300,000 square feet of space at the company’s midtown New York City property — 399 Park Avenue property.
In fact, the Zacks Consensus Estimate for the base rent is $536 million, higher as compared to $526 million reported in the third quarter. Additionally, total rental revenues for the quarter are estimated to be $663 million, reflecting a projected increase of 1.2% sequentially.
While the company’s office portfolio is expected to report decent performance on the back of economic growth, its hotel property seems to lag in the fourth quarter. Specifically, quarterly revenues for its hotel property are pegged at $12.1 million, down from the prior-quarter reported figure of $13.7 million.
While the company anticipates fourth-quarter 2018 FFO per share of $1.68-$1.70, the Zacks Consensus Estimate for the same is currently pegged at the lower end of the range, indicating 12.7% growth from the year-ago quarter. In addition, this figure remained unchanged over the last 30 days.
Moreover, the company expects full-year 2018 FFO per share of $6.39-$6.41. The Zacks Consensus Estimate for the same is pinned at $6.40, remaining unchanged over the past month.
Earnings Whispers
Here is what our quantitative model predicts:
Boston Properties has the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Boston Properties’ Earnings ESP is +0.33%.
Zacks Rank: It currently carries a Zacks Rank of 3.
A positive Earnings ESP is a meaningful and leading indicator of a likely beat in terms of FFO per share. This, when combined with a favorable Zacks rank, makes us reasonably confident of a positive surprise.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Equity Residential (EQR - Free Report) , scheduled to release earnings on Jan 29, has an Earnings ESP of +0.82% and a Zacks Rank #2.
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.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Boston Properties (BXP) to Post Q4 Earnings: What's in Store?
Boston Properties, Inc. (BXP - Free Report) is scheduled to report fourth-quarter 2018 results on Jan 29, after the market closes. The company’s results will likely reflect year-over-year growth in funds from operations (FFO) per share and a decline in the top line.
In the last reported quarter, this office real estate investment trust’s (REIT) FFO of $1.64 per share surpassed the Zacks Consensus Estimate of $1.63. Results were supported by higher revenues from development and management services.
Over the preceding four quarters, the company surpassed the FFO per share estimates in two occasions, met in the other and missed in another, the average negative surprise being 0.18%. This is depicted in the graph below:
Boston Properties, Inc. Price and EPS Surprise
Boston Properties, Inc. Price and EPS Surprise | Boston Properties, Inc. Quote
Let’s see how things are shaping up for this announcement.
Factors to Influence Q4 Results
The U.S. office real estate market has been gaining traction on the back of economic improvement and recovery in the job market. Particularly, as the economy revives, existing business grows and therefore, corporate sectors seek expansion, renting more space to accommodate the increased workforce. Furthermore, amid healthy growth in demand for office spaces, office landlords can raise rents for properties.
Per a study by the commercial real estate services firm — CBRE Group (CBRE - Free Report) — the fourth-quarter office vacancy rate declined to its lowest level since 2011 by 10 basis points (bps) to 12.6%. Further, job growth boosted annual net absorption to 58.3 million square feet of space — the highest since 2015.
Also, Boston and San Francisco, where Boston Properties has significant presence, witnessed rent growth of 6.5% or higher. These encouraging statistics are anticipated to have driven significant leasing activity and rental revenues in the company’s markets.
Notably, in late December, it secured a lease with Millennium Management for renting more than 300,000 square feet of space at the company’s midtown New York City property — 399 Park Avenue property.
In fact, the Zacks Consensus Estimate for the base rent is $536 million, higher as compared to $526 million reported in the third quarter. Additionally, total rental revenues for the quarter are estimated to be $663 million, reflecting a projected increase of 1.2% sequentially.
While the company’s office portfolio is expected to report decent performance on the back of economic growth, its hotel property seems to lag in the fourth quarter. Specifically, quarterly revenues for its hotel property are pegged at $12.1 million, down from the prior-quarter reported figure of $13.7 million.
While the company anticipates fourth-quarter 2018 FFO per share of $1.68-$1.70, the Zacks Consensus Estimate for the same is currently pegged at the lower end of the range, indicating 12.7% growth from the year-ago quarter. In addition, this figure remained unchanged over the last 30 days.
Moreover, the company expects full-year 2018 FFO per share of $6.39-$6.41. The Zacks Consensus Estimate for the same is pinned at $6.40, remaining unchanged over the past month.
Earnings Whispers
Here is what our quantitative model predicts:
Boston Properties has the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Boston Properties’ Earnings ESP is +0.33%.
Zacks Rank: It currently carries a Zacks Rank of 3.
A positive Earnings ESP is a meaningful and leading indicator of a likely beat in terms of FFO per share. This, when combined with a favorable Zacks rank, makes us reasonably confident of a positive surprise.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Omega Healthcare Investors, Inc. (OHI - Free Report) , slated to release fourth-quarter results on Feb 11, has an Earnings ESP of +0.26% and a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equity Residential (EQR - Free Report) , scheduled to release earnings on Jan 29, has an Earnings ESP of +0.82% and a Zacks Rank #2.
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.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>