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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.

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