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Simon Property (SPG) Q2 FFO and Revenues Miss Estimates
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Simon Property Group, Inc.’s (SPG - Free Report) second-quarter 2020 funds from operations (FFO) per share of $2.12 missed the Zacks Consensus Estimate of $2.31. The reported figure also plunged 29.1% from the year-ago quarter’s $2.99.
Further, the company generated revenues of $1.062 billion in the quarter, lagging the Zacks Consensus Estimate of $1.212 billion. The revenue figure also comes in 24% lower than the prior-year quarter reported tally.
Results reflect the coronavirus pandemic’s adverse impact on the company’s domestic and international operations, with an impact of $1.13 per share, mainly on reduced lease income and ancillary property revenues. However, these negatives were partly offset by roughly 36 cents per share from cost-reduction moves.
Notably, Simon Property’s retail properties were closed, in total for 10,500 shopping days during the second quarter. As of Jul 10, all of the company's retail properties were reopened, though seven retail properties in California were later closed on Jul 15, and remain shut because of a new restrictive governmental order.
Finally, as of Aug 7, 91% of the tenants across the company's U.S. retail properties were open and operating. Per the company’s press release, Simon Property’s rent collections from U.S. retail portfolio, including some level of rent deferrals, amounted to roughly 51% of its contractual rent billed for April and May combined, around 69% for June, and 73% for July with merely de minimis deferrals.
Inside the Headline Numbers
For the U.S. Malls and Premium Outlets portfolio, occupancy was 92.9% as of Jun 30, 2020, shrinking 150 basis points year on year. Base minimum rent per square feet was $56.02 as of Jun 30, 2020, up 2.8% year on year. Furthermore, leasing spread per square foot for the trailing 12-month period ended Jun 30, 2020 was flat.
Comparable property net operating income (NOI) for the reported quarter fell 18.5% and portfolio NOI declined 21%.
Portfolio Update
During the June-end quarter, Siam Premium Outlets Bangkok (Bangkok, Thailand), in which the company has a 50% interest, opened with 264,000 square feet of high-quality, name brand stores. This marked the first Premium Outlet Center in Thailand. Moreover, the 178,000 square-foot phase IV expansion of Gotemba Premium Outlets (Gotemba City, (Tokyo) Japan) opened during the quarter and Simon enjoys 40% ownership of this center.
For some redevelopment and new development projects in the United States and internationally that are nearing completion, construction continues. The company’s share of remaining required cash funding is roughly $140 million for these projects that are presently slated to be finished in 2020 or 2021.
Balance Sheet Position
Simon Property exited second-quarter 2020 with $8.5 billion of liquidity. This comprised $3.6 billion of cash on hand, including its share of joint-venture cash, as well as $4.9 billion of available capacity under its revolving credit facilities and term loan, net of $702 million outstanding under its U.S. commercial paper program.
Following the quarter-end, the company accomplished a three tranche senior notes offering aggregating $2.0 billion. Further, in July, the company used cash on hand and proceeds from the offering for repayment of $2.5 billion outstanding under its credit facilities.
Dividend Update
Simon Property paid a second-quarter common stock cash dividend of $1.30 per share on Jul 24, and announced that it will declare a common stock dividend for the third quarter on or before Sep 30, 2020.
The company also noted that it expects to pay at least $6 per share in common stock dividend in cash for the current year, subject to approval from the board of directors.
Currently, Simon Property carries a Zacks Rank #4 (Sell).
Kimco Realty Corp.’s (KIM - Free Report) second-quarter 2020 FFO per share came in at 24 cents, marginally surpassing the Zacks Consensus Estimate of 23 cents. Results reflected healthy rental rate leasing spreads on new lease and renewals. However, same-property net operating income (NOI) was affected mainly due to a charge for potentially uncollectible accounts receivable.
Regency Centers Corporation’s (REG - Free Report) second-quarter NAREIT FFO per share of 61 cents missed the Zacks Consensus Estimate of 78 cents. The reported figure was also 35.8% lower than the prior-year quarter’s 95 cents. Results reflected a decline in same-property net operating income (NOI) on a higher rate of uncollectible lease income in relation to the pandemic.
Realty Income Corporation’s (O - Free Report) adjusted FFO per share of 86 cents surpassed the Zacks Consensus Estimate of 76 cents in the April-June quarter. The reported figure is also up 4.9% from the prior-year quarter’s 82 cents. Per management, second-quarter operating results “continue to demonstrate the stability and resiliency” of the company’s business. The company also noted that its diversified and high-quality real estate portfolio, mainly leased to tenants offering non-discretionary and/or low price point goods or services, witnessed healthy occupancy level of 98.5% at the end of the quarter.
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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Simon Property (SPG) Q2 FFO and Revenues Miss Estimates
Simon Property Group, Inc.’s (SPG - Free Report) second-quarter 2020 funds from operations (FFO) per share of $2.12 missed the Zacks Consensus Estimate of $2.31. The reported figure also plunged 29.1% from the year-ago quarter’s $2.99.
Further, the company generated revenues of $1.062 billion in the quarter, lagging the Zacks Consensus Estimate of $1.212 billion. The revenue figure also comes in 24% lower than the prior-year quarter reported tally.
Results reflect the coronavirus pandemic’s adverse impact on the company’s domestic and international operations, with an impact of $1.13 per share, mainly on reduced lease income and ancillary property revenues. However, these negatives were partly offset by roughly 36 cents per share from cost-reduction moves.
Notably, Simon Property’s retail properties were closed, in total for 10,500 shopping days during the second quarter. As of Jul 10, all of the company's retail properties were reopened, though seven retail properties in California were later closed on Jul 15, and remain shut because of a new restrictive governmental order.
Finally, as of Aug 7, 91% of the tenants across the company's U.S. retail properties were open and operating. Per the company’s press release, Simon Property’s rent collections from U.S. retail portfolio, including some level of rent deferrals, amounted to roughly 51% of its contractual rent billed for April and May combined, around 69% for June, and 73% for July with merely de minimis deferrals.
Inside the Headline Numbers
For the U.S. Malls and Premium Outlets portfolio, occupancy was 92.9% as of Jun 30, 2020, shrinking 150 basis points year on year. Base minimum rent per square feet was $56.02 as of Jun 30, 2020, up 2.8% year on year. Furthermore, leasing spread per square foot for the trailing 12-month period ended Jun 30, 2020 was flat.
Comparable property net operating income (NOI) for the reported quarter fell 18.5% and portfolio NOI declined 21%.
Portfolio Update
During the June-end quarter, Siam Premium Outlets Bangkok (Bangkok, Thailand), in which the company has a 50% interest, opened with 264,000 square feet of high-quality, name brand stores. This marked the first Premium Outlet Center in Thailand. Moreover, the 178,000 square-foot phase IV expansion of Gotemba Premium Outlets (Gotemba City, (Tokyo) Japan) opened during the quarter and Simon enjoys 40% ownership of this center.
For some redevelopment and new development projects in the United States and internationally that are nearing completion, construction continues. The company’s share of remaining required cash funding is roughly $140 million for these projects that are presently slated to be finished in 2020 or 2021.
Balance Sheet Position
Simon Property exited second-quarter 2020 with $8.5 billion of liquidity. This comprised $3.6 billion of cash on hand, including its share of joint-venture cash, as well as $4.9 billion of available capacity under its revolving credit facilities and term loan, net of $702 million outstanding under its U.S. commercial paper program.
Following the quarter-end, the company accomplished a three tranche senior notes offering aggregating $2.0 billion. Further, in July, the company used cash on hand and proceeds from the offering for repayment of $2.5 billion outstanding under its credit facilities.
Dividend Update
Simon Property paid a second-quarter common stock cash dividend of $1.30 per share on Jul 24, and announced that it will declare a common stock dividend for the third quarter on or before Sep 30, 2020.
The company also noted that it expects to pay at least $6 per share in common stock dividend in cash for the current year, subject to approval from the board of directors.
Currently, Simon Property carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Simon Property Group, Inc. Price, Consensus and EPS Surprise
Simon Property Group, Inc. price-consensus-eps-surprise-chart | Simon Property Group, Inc. Quote
Performance of Other Retail REITs
Kimco Realty Corp.’s (KIM - Free Report) second-quarter 2020 FFO per share came in at 24 cents, marginally surpassing the Zacks Consensus Estimate of 23 cents. Results reflected healthy rental rate leasing spreads on new lease and renewals. However, same-property net operating income (NOI) was affected mainly due to a charge for potentially uncollectible accounts receivable.
Regency Centers Corporation’s (REG - Free Report) second-quarter NAREIT FFO per share of 61 cents missed the Zacks Consensus Estimate of 78 cents. The reported figure was also 35.8% lower than the prior-year quarter’s 95 cents. Results reflected a decline in same-property net operating income (NOI) on a higher rate of uncollectible lease income in relation to the pandemic.
Realty Income Corporation’s (O - Free Report) adjusted FFO per share of 86 cents surpassed the Zacks Consensus Estimate of 76 cents in the April-June quarter. The reported figure is also up 4.9% from the prior-year quarter’s 82 cents. Per management, second-quarter operating results “continue to demonstrate the stability and resiliency” of the company’s business. The company also noted that its diversified and high-quality real estate portfolio, mainly leased to tenants offering non-discretionary and/or low price point goods or services, witnessed healthy occupancy level of 98.5% at the end of the quarter.
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.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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