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Simon Property (SPG) Beats on Q3 FFO, Ups '21 View, Hikes Dividend
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Simon Property Group, Inc.’s (SPG - Free Report) third-quarter 2021 funds from operations (FFO) per share of $3.13 handily exceeded the Zacks Consensus Estimate of $2.47.
This performance was backed by better-than-expected top-line growth. The retail REIT behemoth also raised the 2021 FFO per share outlook based on its results in the year so far and expectations for the rest of the year. It also announced a hike in the quarterly dividend.
According to David Simon, chairman, chief executive officer and president, "Demand for our space from a broad spectrum of tenants is growing. Occupancy gains continued, retailer sales accelerated, including our owned brands, and cash flow increased.”
The company generated revenues of $1.29 billion during the quarter, surpassing the Zacks Consensus Estimate of $1.23 billion.
The quarterly FFO per share also compares favorably with the year-ago figure of $2.05, and revenues increased 22.2%, year on year.
Inside the Headline Numbers
For the U.S. Malls and Premium Outlets portfolio, occupancy was 92.8% as of Sep 30, 2021, expanding 140 basis points (bps) year on year. Base minimum rent per square feet was $53.91 as of Sep 30, 2021, down 4% year on year.
Domestic property net operating income (NOI) increased 24.5%, year on year. Portfolio NOI, which comprises NOI from domestic properties, international properties and NOI from its investment in Taubman Realty Group, climbed 34.3% from the prior-year period.
Balance Sheet Position
Simon Property exited third-quarter 2021 with $8.0 billion of liquidity. This comprised $1.1 billion of cash on hand, including its share of joint-venture cash, as well as $6.9 billion of available capacity under the company’s revolving credit facilities, net of $500 million outstanding under the U.S. commercial paper program.
Outlook
Simon Property raised the 2021 FFO per share guidance and now projects the same at $11.55-$11.65, up from the $10.70-$10.80 guided earlier. This suggests an increase of 85 cents per share at the mid-point.The guided range is also above the Zacks Consensus Estimate of $10.86.
Dividend Hike
Simon Property announced a 10% sequential hike in its fourth-quarter 2021 dividend. The company will now pay $1.65 per share compared with the $1.50 paid earlier. The increased dividend will be paid on Dec 31, to shareholders on record as of Dec 10, 2021.
The company paid its third-quarter dividend of $1.50 per share, in cash, on Sep 30, which marked a 7.1% hike sequentially and 15.4%, year over year.
We now look forward to the earnings release of other retail REITs, Federal Realty Investment Trust (FRT - Free Report) , Kimco Realty Corporation (KIM - Free Report) and Regency Centers Corporation (REG - Free Report) , which are slated to be out this week only.
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) Beats on Q3 FFO, Ups '21 View, Hikes Dividend
Simon Property Group, Inc.’s (SPG - Free Report) third-quarter 2021 funds from operations (FFO) per share of $3.13 handily exceeded the Zacks Consensus Estimate of $2.47.
This performance was backed by better-than-expected top-line growth. The retail REIT behemoth also raised the 2021 FFO per share outlook based on its results in the year so far and expectations for the rest of the year. It also announced a hike in the quarterly dividend.
According to David Simon, chairman, chief executive officer and president, "Demand for our space from a broad spectrum of tenants is growing. Occupancy gains continued, retailer sales accelerated, including our owned brands, and cash flow increased.”
The company generated revenues of $1.29 billion during the quarter, surpassing the Zacks Consensus Estimate of $1.23 billion.
The quarterly FFO per share also compares favorably with the year-ago figure of $2.05, and revenues increased 22.2%, year on year.
Inside the Headline Numbers
For the U.S. Malls and Premium Outlets portfolio, occupancy was 92.8% as of Sep 30, 2021, expanding 140 basis points (bps) year on year. Base minimum rent per square feet was $53.91 as of Sep 30, 2021, down 4% year on year.
Domestic property net operating income (NOI) increased 24.5%, year on year. Portfolio NOI, which comprises NOI from domestic properties, international properties and NOI from its investment in Taubman Realty Group, climbed 34.3% from the prior-year period.
Balance Sheet Position
Simon Property exited third-quarter 2021 with $8.0 billion of liquidity. This comprised $1.1 billion of cash on hand, including its share of joint-venture cash, as well as $6.9 billion of available capacity under the company’s revolving credit facilities, net of $500 million outstanding under the U.S. commercial paper program.
Outlook
Simon Property raised the 2021 FFO per share guidance and now projects the same at $11.55-$11.65, up from the $10.70-$10.80 guided earlier. This suggests an increase of 85 cents per share at the mid-point.The guided range is also above the Zacks Consensus Estimate of $10.86.
Dividend Hike
Simon Property announced a 10% sequential hike in its fourth-quarter 2021 dividend. The company will now pay $1.65 per share compared with the $1.50 paid earlier. The increased dividend will be paid on Dec 31, to shareholders on record as of Dec 10, 2021.
The company paid its third-quarter dividend of $1.50 per share, in cash, on Sep 30, which marked a 7.1% hike sequentially and 15.4%, year over year.
Currently, Simon Property carries a Zacks Rank #2 (Buy). 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
We now look forward to the earnings release of other retail REITs, Federal Realty Investment Trust (FRT - Free Report) , Kimco Realty Corporation (KIM - Free Report) and Regency Centers Corporation (REG - Free Report) , which are slated to be out this week only.
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.