Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

HCP, Inc. (HCP - Analyst Report), a real estate investment trust (REIT), reported second quarter 2012 FFO (funds from operations) of $293.6 million or 69 cents per share compared with $317.9 million or 78 cents per share in the year-earlier quarter.

Excluding non-recurring items, FFO for the reported quarter was $293.6 million or 69 cents per share compared with $312.2 million or 77 cents per share in the year-ago quarter. Recurring FFO per share in the quarter beat the Zacks Consensus Estimate by a penny.

HCP reported total revenue of $464.4 million during the quarter compared with $488.1 million in the year-ago period. Total revenue in the reported quarter missed the Zacks Consensus Estimate of $469.0 million.

Adjusted same-property net operating income (NOI) of the company stood at $224.8 million in the quarter versus $218.0 million in the year-ago period. Cash NOI in the same property portfolio increased 3.1% on a year-over-year basis.

During the reported quarter, HCP invested about $59 million to fund development and other capital projects, primarily in the life science and senior housing segments. The company also acquired a life science facility for $8 million and a land parcel for $3 million. Additionally, HCP made a debt investment of $215 million in the UK with a yield to maturity of 12.5% during the quarter.

Subsequent to the end of the quarter, HCP acquired a medical office building (MOB) totaling 80,000 square feet for $14 million. Also the company entered into agreements to acquire eight on-campus MOBs for $81 million from Scottsdale Healthcare and  a portfolio of 12 MOBs from The Boyer Company valued at $179 million.

During the quarter, the company issued $300 million of 3.15% senior unsecured notes, scheduled to mature in 2022. The transaction generated net proceeds of approximately $293.7 million. Also the company entered into an agreement for a four-year 1.81% unsecured loan worth $215 million. Additionally, the company completed an offering of 8.97 million shares worth $41.88 per share, totaling $376 million during the second quarter of 2012.

At the end of the quarter, the company had cash and cash equivalents of $169.6 million. For full-year 2012, HCP increased its adjusted FFO guidance from $2.71 to $2.77 per share to $2.73 to $2.79. The company also expects cash NOI guidance in the same-property portfolio to be in the range of 3.5%-4.5%.

HCP currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Health Care REIT, Inc (HCN - Analyst Report) carries a Zacks #3 Rank, which translates into a short-term Hold rating.

Note: FFO, 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.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%