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Macerich's (MAC) Q2 FFO Beats, Revenues Miss, Stock Gains

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The Macerich Company (MAC - Free Report) reported second-quarter funds from operations (FFO) per share of 46 cents, excluding financing expenses in relation to Chandler Freehold, surpassing the Zacks Consensus Estimate by a cent.

Shares of MAC gained 2.68% since the release of second-quarter results on Jul 28.

In the second quarter, robust leasing demand and tenant sales continued to gain momentum. So far into 2022, the portfolio comparable tenant sales from spaces less than 10,000 square feet were 7.6% higher year over year. Further, MAC’s portfolio tenant sales per square foot for spaces less than 10,000 square feet in the trailing 12 months ended Jun 30, 2022, touched $860, taking it to a record high.

Macerich generated revenues of $204.1 million in the second quarter. However, the figure lagged the Zacks Consensus Estimate of $216.7 million.

Moreover, FFO per share and revenues fell 22% and 5.3%, respectively, on a year-over-year basis.

Behind the Headlines

As of Jun 30, 2022, portfolio occupancy was 91.8%, up from 89.4% on Jun 30, 2021.

For the 12 months ended Jun 30, 2022, re-leasing spreads were 0.6% more than the expiring base rent.  

Same-center net operating income (NOI), including lease termination income, increased 7.8% year over year.

During second-quarter 2022, Macerich signed 274 new and renewal leases encompassing 1.2 million square feet, representing a nearly 27% increase in the number of leases signed year over year.

Balance Sheet

As of Jul 28, MAC had more than $630 million of liquidity, including unrestricted cash in hand, aggregating more than $170 million. The balance represented available capacity on its revolving line of credit.

As of Jun 30, 2022, the total debt inclusive of pro-rata share of joint ventures was $6.86 billion with a weighted average annual effective interest rate of 4.01%.

Guidance

Macerich narrowed the guidance range and increased the midpoint of its 2022 FFO per share.

It expects 2022 FFO per share, excluding financing expenses in relation to Chandler Freehold, in the range of $1.92-$2.04, revised from the earlier expectation of $1.90-$2.04. The Zacks Consensus Estimate for the same is currently pegged at $1.96.

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 Other REITs
 

Kimco Realty Corp.’s (KIM - Free Report) second-quarter 2022 FFO per diluted share came in at 40 cents, surpassing the Zacks Consensus Estimate of 38 cents. The figure grew 17.6% from the year-ago quarter’s 34 cents.

Results reflect year-over-year growth in the top line. The rise in occupancy levels and rental rate growth aided KIM’s performance. It raised 2022 FFO outlook.

Boston Properties Inc.’s (BXP - Free Report) second-quarter 2022 FFO per share of $1.94 beat the Zacks Consensus Estimate of $1.85. The figure also compared favorably with the year-ago quarter’s $1.72.

BXP’s quarterly results reflect growth in the bottom line. Also, it experienced strong leasing activity during the quarter.

AvalonBay Communities, Inc.’s (AVB - Free Report) second-quarter 2022 core FFO per share of $2.43 surpassed the Zacks Consensus Estimate of $2.35. The figure increased 22.7% on a year-over-year basis.

AVB’s second-quarter results reflect a year-over-year increase in same-store residential rental revenues driven by strong, effective lease rate growth and higher rent relief.

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.