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Ventas (VTR) Q4 FFO Tops Estimates, Revenues & NOI Decline Y/Y

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Ventas, Inc. (VTR - Free Report) has reported fourth-quarter 2020 normalized funds from operations (FFO) per share of 83 cents, surpassing the Zacks Consensus Estimate of 73 cents. However, the figure declined 10%from the year-ago quarter’s number.

The company generated revenues of $921.2 million in the fourth quarter, which lagged the Zacks Consensus Estimate of $930.7 million. Further, the top line declined 7.5% year over year.

Same-store cash net operating income (NOI) decline in senior housing operating portfolio (“SHOP”) and triple-net leased portfolio resulted in a year-over-year decrease in revenues.

Per management,“COVID-19 presented the most difficult clinical conditions across the country between November 2020 and through January of this year. As a result, occupancy in our SHOP, after benefitting from steadily improving trends through October 2020, declined in the fourth quarter and into 2021, as operators experienced elevated move-outs and limited tours and move-ins to keep residents safe.”

For 2020, the company reported normalized FFO per share of $3.32, down 13.8% from the prior year’s $3.85. The reported figure, nonetheless, outpaced the Zacks Consensus Estimate of $3.22. Total revenues of $3.79 billion declined 2% year over year.

Quarter in Detail

For the fourth quarter, same-store cash NOI growth for the total property portfolio (1,096 assets) declined 11.8% year over year. Segment wise, same-store cash NOI for the triple-net leased portfolio declined 10% year over year, while the SHOP portfolio fell 24.7%. Meanwhile, the office portfolio reported a year-over-year rise of 2.9%.

Balance Sheet Position

Ventas exited fourth-quarter 2020 with cash and cash equivalents of $413.3 million, up from $106.4 million recorded as of the 2019 end. Further, as of Dec 31, 2020, its full-year net debt to adjusted pro forma EBITDA ratio was 6.1X.

The company had $3 billion of liquidity, consisting of $0.3 billion of cash and cash equivalents, $2.7 billion of available capacity on hand, and no commercial paper outstanding as of Feb 16.

Outlook

Ventas expects first-quarter 2021 results to continue to be affected by the COVID-19 pandemic. Accordingly, first-quarter 2021 normalized FFO per share is guided at 66-71 cents. The Zacks Consensus Estimate for the same is pegged at 72 cents.

Ventas, Inc. Price, Consensus and EPS Surprise

 

Ventas, Inc. Price, Consensus and EPS Surprise

Ventas, Inc. price-consensus-eps-surprise-chart | Ventas, Inc. Quote

Ventas currently carries a Zacks Rank #4 (Sell).

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

Performance of Other REITS

Equinix’s (EQIX - Free Report) fourth-quarter 2020 adjusted FFO per share was $5.76, beating the Zacks Consensus Estimate of $5.65. The figure also improved 4.5% from the year-ago quarter’s $5.51.

Healthpeak Properties, Inc.  reported fourth-quarter 2020 FFO as adjusted per share of 41 cents, surpassing the Zacks Consensus Estimate of 40 cents. However, the reported figure compared unfavorably with FFO as adjusted of 44 cents per share recorded in the prior-year quarter.

Highwoods Properties, Inc.’s (HIW - Free Report) fourth-quarter 2020 FFO per share of 87 cents missed the Zacks Consensus Estimate of 88 cents. Also, the reported figure declined 4.4% from 91 cents recorded in the year-ago period.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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