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HCP, Inc (HCP - Analyst Report) reported first quarter 2012 FFO (funds from operations) of $264.8 million or 64 cents per share, compared with $149.7 million or 40 cents in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Excluding non-recurring items, FFO for the reported quarter was $275.2 million or 67 cents per share compared with $181.9 million or 56 cents in the year-ago quarter.  Recurring FFO in the quarter was in line with the Zacks Consensus Estimate.

HCP reported total revenue of $459.0 million during the quarter compared with $331.1 million in the year-ago period. Total revenue in the reported quarter missed the Zacks Consensus Estimate of $468.0 million.

During the reported quarter, HCP invested about $40 million worth of capital to fund development and other capital projects, primarily in the life science and senior housing segments. The company also sold a medical office building for $7 million.

Adjusted same-property net operating income (NOI) of the company stood at $221.2 million in the quarter compared with $211.3 million in the year-ago period.

During the quarter, the company issued $450 million of 3.75% senior unsecured notes, scheduled to mature in 2019. The transaction generated net proceeds of approximately $444.0 million, which were utilized to repay the debt under its revolving credit facility and for general corporate purposes.

Additionally, the company priced 9 million shares at $39.93 per share, totaling $359 million during the first quarter of 2012.

During the quarter, HCP amended its existing unsecured revolving credit facility to extend the maturity by an additional year as well as reduce its interest burden. The modified credit facility with a borrowing capacity of $1.5 billion is expected to mature in March 2016.

At the end of the quarter, the company had cash and cash equivalents of $347.4 million. For full-year 2012, HCP expects adjusted FFO in the range of $2.71 to $2.77 per share.

HCP currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Health Care REIT, Inc (HCN - Analyst Report) also carries a Zacks #3 Rank.

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