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Vornado Realty's (VNO) Q3 FFO Misses, Revenues Top Estimates

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Vornado Realty Trust (VNO - Free Report) reported third-quarter 2020 funds from operations (FFO) plus assumed conversions as adjusted of 59 cents per share, missing the Zacks Consensus Estimate of 64 cents. The reported figure also plunged 33.7% year over year.

A decline in same-store net operating income (NOI) in the New York portfolio and theMART affected the company’s quarterly results.

Total revenues were $364 million in the reported quarter, surpassing the Zacks Consensus Estimate of $363 million. However, the revenue figure compares unfavorably with the year-ago number of $466 million.

During the reported quarter, the company collected 93% of rent due. This comprised collections of 95% from its office tenants and 82% from retail tenants.

Behind the Headline Numbers

In the New York portfolio, 1,453,000 square feet of office space (1,121,000 square feet of space at share) and 25,000 square feet of retail space (22,000 square feet at share) were leased during the September-end quarter. Also, 44,000 square feet of area (all at share) was leased at theMart and 90,000 square feet of space was leased at 555 California Street (63,000 square feet at share).

At the end of the third quarter, occupancy in the New York portfolio was 94.3%, which shrunk 90 basis points (bps) sequentially and 250 bps year over year. Occupancy in theMART was 89.8%, down 160 bps sequentially and 520 bps year over year. Furthermore, occupancy in 555 California Street was 98.4%, down 60 bps sequentially and 160 bps year over year.

During the reported quarter, total same-store NOI decreased 16.4% year over year. Same-store NOI in the company’s 555 California Street increased 2%. However, same-store NOI at theMART and New York portfolio declined 46.3% and 14.5%, respectively.

During the July-September period, Vornado closed the sale of 19 condominium units at 220 CPS for net proceeds amounting to $591.1 million. This resulted in a financial statement net gain of $214.6 million.

As of Sep 30, 2020, Vornado had $1.41 billion of cash and cash equivalents, down from the $1.52 billion reported as of Dec 31, 2019.

Vornado Realty Trust Price, Consensus and EPS Surprise

Vornado Realty Trust Price, Consensus and EPS Surprise

Vornado Realty Trust price-consensus-eps-surprise-chart | Vornado Realty Trust Quote

Vornado Realty currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITS

Boston Properties Inc.’s (BXP - Free Report) third-quarter 2020 FFO per share of $1.57 missed the Zacks Consensus Estimate of $1.64. The reported figure also slid 4.3% from the year-ago quarter’s $1.64.

SITE Centers Corp.’s (SITC - Free Report) third-quarter operating FFO per share of 23 cents came in line with the Zacks Consensus Estimate. The reported figure, however, declined 23.3% year over year.

Highwoods Properties, Inc. (HIW - Free Report) third-quarter 2020 FFO per share of 86 cents missed the Zacks Consensus Estimate of 88 cents. The figure included 5 cents from debt extinguishment charges and non-cash straight-line credit losses. Nonetheless, the reported figure improved 3.6% from the 83 cents reported in the year-ago period.

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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