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Kimco's (KIM) Q1 FFO & Revenues Beat Estimates, Stock Down

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Kimco Realty Corp.’s (KIM - Free Report) first-quarter 2022 NAREIT funds from operations (FFO) came in at 39 cents per share, surpassing the Zacks Consensus Estimate of 37 cents. This figure also grew 18.2% from the year-ago quarter.

Results reflect better-than-anticipated revenues. Kimco also issued a revised 2022 FFO outlook.

Shares of KIM have lost almost 1.7% in pre-market trading. The full-day trading session will display a clearer picture.

This retail REIT generated revenues of $427.2 million, beating the consensus mark of $422.2 million. Quarterly revenues jumped 51.3% year over year.

According to Conor Flynn, Kimco’s CEO, “Our ongoing commitment to leasing, leasing, and leasing resulted in our team signing 4.7 million square feet which drove both sequential and year-over-year occupancy gains as well as strong NOI and FFO growth to start 2022.”

Moreover, this retail REIT recently raised the quarterly cash dividend on common shares by 5.3% sequentially to 20 cents per share, which is payable on Jun 23 to shareholders of record on Jun 9.

Quarter in Detail

Pro-rata portfolio occupancy at the end of the first quarter was 94.7%, reflecting an expansion of 120 basis points (bps) year over year and 30 bps sequentially. Pro-rata anchor occupancy was 97.3%, up 110 bps year over year and 20 bps sequentially. Pro-rata small shop occupancy ended the quarter at 88.4%, representing an uptick of 260 bps year over year and 70 bps sequentially.

The company signed 653 leases, aggregating 4.7 million square feet in the quarter. Blended pro-rata rental-rate spreads on comparable spaces increased 7.2%, with rental rates for new leases growing 18.6% and renewals and options rising 6.4%.

Same-property net operating income (NOI), including redevelopments, increased 8.9% year over year to $320.9 million.

During the first quarter, Kimco sold three shopping centers that were in joint ventures, totaling 626,000 square feet, for $81.9 million. The company’s pro-rata share of the sales price was $17.5 million.

Kimco also separately sold four land parcels for $8.7 million. Further, it acquired the full interest in two adjacent parcels at existing centers for $18.4 million.

Balance Sheet Position

Kimco exited the first quarter of 2022 with cash and cash equivalents of $370.3 million. This retail REIT had nearly $2.4 billion of immediate liquidity at the end of the reported quarter. This included full availability under its $2-billion unsecured revolving credit facility.

At the end of the quarter, Kimco’s investments in Albertsons Companies, Inc. were valued at $1.3 billion, subject to certain lock-up provisions set to expire in June 2022.

Revised 2022 Guidance

Kimco projects NAREIT FFO per share in the range of $1.50-$1.53, up from the prior outlook of $1.46-$1.50. The Zacks Consensus Estimate for the same is currently pegged at $1.51.

Kimco’s full-year outlook is backed by assumptions of positive same-property NOI growth and a credit loss on rental revenues of 100 bps at the midpoint. Total property acquisitions, including structured investments, and net of dispositions are estimated at $100 million.

Kimco Realty Corporation Price, Consensus and EPS Surprise

Kimco Realty Corporation Price, Consensus and EPS Surprise

Kimco Realty Corporation price-consensus-eps-surprise-chart | Kimco Realty Corporation Quote

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

Performance of Other REITs

SBA Communications Corporation’s (SBAC - Free Report) first-quarter AFFO per share of $2.96 surpassed the Zacks Consensus Estimate of $2.88. This reflects a rise of 14.7% from the prior-year quarter’s $2.58.

SBAC’s results reflect robust operating performance in site-leasing and development businesses, both on the domestic and international front. The company continues to benefit from the addition of sites to its portfolio.

Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported first-quarter 2022 adjusted FFO per share of $2.05, surpassing the Zacks Consensus Estimate of $2.00. The reported FFO per share also compared favorably with the year-ago quarter’s $1.91.

ARE witnessed continued healthy leasing activity and rental rate growth during the quarter. Rental revenues in the quarter were $615.1 million, up 28.2% from the prior-year quarter.

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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