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Macerich (MAC) Q4 FFO & Revenues Beat Estimates, Stock Rises

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Shares of The Macerich Company (MAC - Free Report) rallied 2.42% during yesterday’s regular trading session on the NYSE as this retail REIT delivered better-than-expected adjusted funds from operations (FFO) per share on the solid top line. The company experienced a rise in the occupancy level.

In the second half of the year, there was a surge in customer traffic even amid the increase in COVID-19 case rates from the Delta and Omicron variants.

Macerich reported FFO per share of 53 cents, excluding financing expenses in relation to Chandler Freehold, and a loss on the extinguishment of debt, which exceeded the Zacks Consensus Estimate of 48 cents. Moreover, the figure compared favorably with the year-ago quarter of 45 cents.

The company generated revenues of $229.4 million in the fourth quarter. The top line surpassed the Zacks Consensus Estimate of $219.9 million as well as increased 17.9% year over year.

There was robust tenant sales and property traffic volumes through the holiday season. In the fourth quarter of 2021, portfolio comparable tenant sales from spaces less than 10,000 square feet were 12% higher than the pre-pandemic fourth quarter of 2019. In the holiday period, traffic was roughly 95% of the pre-pandemic holiday period of 2019.

For 2021, Macerich reported FFO per share of $2.03, excluding financing expenses in relation to Chandler Freehold, and a loss on the extinguishment of debt, which exceeded the Zacks Consensus Estimate of $1.97. However, the figure compared unfavorably with the year-ago number of $2.16. Revenues of $847.4 million surged 7.8% year over year.

Behind the Headlines

As of Dec 31, 2021, portfolio occupancy was 91.5%, reflecting a 120-basis-point expansion from 90.3% as of Sep 30, 2021.

For the twelve months ended Dec 31, 2021, re-leasing spreads versus the expiring base rent were +5%.

Same-center net operating income or NOI (including lease termination income) increased 36.1% from the prior-year quarter number.

As of Dec 31, 2021, it had cash and cash equivalents of $112.5 million. As of Feb 10, MAC had roughly $622 million of liquidity, including unrestricted cash in hand, aggregating more than $190 million. The balance represented available capacity on its revolving line of credit.

The company made progress toward deleveraging, with $1.7 billion of debt repaid in 2021. This marked a 20% reduction in its share of debt since Dec 31, 2020.

Guidance

Macerich expects 2022 FFO per share in the range of $1.85-$2.05. The Zacks Consensus Estimate for the same is currently pegged at $1.93.

Dividend Update

On Jan 27, Macerich announced quarterly cash dividend of 15 cents per share. The dividend will be paid out on Mar 3 to shareholders of record as of Feb 18, 2022.

Currently, Macerich carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Macerich Company The Price, Consensus and EPS Surprise

Macerich Company The Price, Consensus and EPS Surprise

Macerich Company The price-consensus-eps-surprise-chart | Macerich Company The Quote

Performance of Retail REITs

Simon Property Group, Inc.’s (SPG - Free Report) fourth-quarter 2021 FFO per share of $3.09 exceeded the Zacks Consensus Estimate of $2.88. Simon Property’s performance was backed by occupancy and NOI growth. However, SPG generated revenues of $1.33 billion during the quarter, lagging the Zacks Consensus Estimate of $1.35 billion.

Kimco Realty Corp.’s (KIM - Free Report) fourth-quarter 2021 NAREIT FFO came in at 39 cents per share, topping the Zacks Consensus Estimate of 37 cents. This figure also compared favorably with the year-ago quarter’s tally of 31 cents. Kimco’s results reflected better-than-anticipated revenues. KIM also issued its 2022 outlook.

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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