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Welltower (WELL) Q2 FFO Surpass Estimates, Revenues Miss
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Welltower Inc. (WELL - Free Report) reported normalized funds from operations (FFO) per share of 86 cents in second-quarter 2020, which surpassed the Zacks Consensus Estimate of 83 cents. However, the reported figure compares unfavorably with the year-ago quarter’s figure of $1.05.
The company’s seniors housing operating portfolio was severely impacted by the coronavirus pandemic. In fact, the segment witnessed $37 million of property-level expenses in the second quarter related to the virus outbreak. This impacted the company’s normalized FFO per share.
Moreover, it generated revenues of $1.19 billion, which missed the Zacks Consensus Estimate of $1.23 billion. The top line also compared unfavorably with the year-earlier quarter’s reported figure of $1.32 billion.
Quarter in Detail
Welltower's pro-rata gross investments in the second quarter totaled $124 million. This included $6 million in acquisitions and $115 million in development funding.
Apart from this, the company completed property dispositions of $949 million.
It exited the quarter with $1.7 billion of cash and cash equivalents, up from $268.7 million recorded at 2091 end. In addition, as of Jun 30, 2020, it had $3 billion of available borrowing capacity under its unsecured credit facility.
Dividend Update
Welltower announced a cash dividend of 61 cents per share for the second quarter. The dividend will be paid out on Aug 27 to stockholders of record as of Aug 18. This marks the company’s 197th consecutive quarterly cash dividend payout.
COVID-19 Update
During the second quarter, move-out activity surpassed move-ins at the company’s seniors housing operating portfolio, resulting in spot occupancy declines throughout the second quarter. This continued in July, with spot occupancy witnessing a sequential decline of 70 basis points (bps) to 79.4%. In the third quarter, occupancy is expected to decline 125-175 bps.
Moreover, Welltower collected 98% and 97% of second-quarter and July rents, respectively, from its triple-net lease operators.
In its Outpatient Medical ("OM") segment, the company either collected or approved short-term deferrals for more than 99% of second-quarter rents. This consists of 87% cash collections and 12% of short-term deferrals. For July, cash collections improved to more than 95%, with a total of 98% of OM rent due in July either collected or approved for short-term deferral.
American Tower Corporation (AMT - Free Report) reported second-quarter 2020 FFO per share of $2.07, beating the Zacks Consensus Estimate of $2.05. Further, the reported figure improved 1.5% year over year.
Host Hotels & Resorts, Inc. (HST - Free Report) reported second-quarter 2020 loss in terms of adjusted FFO per share of 26 cents, meeting the Zacks Consensus Estimate. Notably, the company reported adjusted FFO per share of 53 cents in the prior-year quarter.
SL Green Realty Corp. (SLG - Free Report) reported second-quarter 2020 FFO per share of $1.70, surpassing the Zacks Consensus Estimate of $1.55. The figure, however, compares unfavorably with the year-ago quarter’s $1.82.
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.
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Welltower (WELL) Q2 FFO Surpass Estimates, Revenues Miss
Welltower Inc. (WELL - Free Report) reported normalized funds from operations (FFO) per share of 86 cents in second-quarter 2020, which surpassed the Zacks Consensus Estimate of 83 cents. However, the reported figure compares unfavorably with the year-ago quarter’s figure of $1.05.
The company’s seniors housing operating portfolio was severely impacted by the coronavirus pandemic. In fact, the segment witnessed $37 million of property-level expenses in the second quarter related to the virus outbreak. This impacted the company’s normalized FFO per share.
Moreover, it generated revenues of $1.19 billion, which missed the Zacks Consensus Estimate of $1.23 billion. The top line also compared unfavorably with the year-earlier quarter’s reported figure of $1.32 billion.
Quarter in Detail
Welltower's pro-rata gross investments in the second quarter totaled $124 million. This included $6 million in acquisitions and $115 million in development funding.
Apart from this, the company completed property dispositions of $949 million.
It exited the quarter with $1.7 billion of cash and cash equivalents, up from $268.7 million recorded at 2091 end. In addition, as of Jun 30, 2020, it had $3 billion of available borrowing capacity under its unsecured credit facility.
Dividend Update
Welltower announced a cash dividend of 61 cents per share for the second quarter. The dividend will be paid out on Aug 27 to stockholders of record as of Aug 18. This marks the company’s 197th consecutive quarterly cash dividend payout.
COVID-19 Update
During the second quarter, move-out activity surpassed move-ins at the company’s seniors housing operating portfolio, resulting in spot occupancy declines throughout the second quarter. This continued in July, with spot occupancy witnessing a sequential decline of 70 basis points (bps) to 79.4%. In the third quarter, occupancy is expected to decline 125-175 bps.
Moreover, Welltower collected 98% and 97% of second-quarter and July rents, respectively, from its triple-net lease operators.
In its Outpatient Medical ("OM") segment, the company either collected or approved short-term deferrals for more than 99% of second-quarter rents. This consists of 87% cash collections and 12% of short-term deferrals. For July, cash collections improved to more than 95%, with a total of 98% of OM rent due in July either collected or approved for short-term deferral.
Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Welltower Inc. Price, Consensus and EPS Surprise
Welltower Inc. price-consensus-eps-surprise-chart | Welltower Inc. Quote
Performance of Other REITs
American Tower Corporation (AMT - Free Report) reported second-quarter 2020 FFO per share of $2.07, beating the Zacks Consensus Estimate of $2.05. Further, the reported figure improved 1.5% year over year.
Host Hotels & Resorts, Inc. (HST - Free Report) reported second-quarter 2020 loss in terms of adjusted FFO per share of 26 cents, meeting the Zacks Consensus Estimate. Notably, the company reported adjusted FFO per share of 53 cents in the prior-year quarter.
SL Green Realty Corp. (SLG - Free Report) reported second-quarter 2020 FFO per share of $1.70, surpassing the Zacks Consensus Estimate of $1.55. The figure, however, compares unfavorably with the year-ago quarter’s $1.82.
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.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>