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What's in Store for Omega Healthcare (OHI) in Q3 Earnings?
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Omega Healthcare Investors, Inc. (OHI - Free Report) is slated to report third-quarter 2022 results on Nov 2 after the closing bell. The company’s quarterly results are likely to display a year-over-year decline in revenues and funds from operations (FFO) per share.
In the last reported quarter, this healthcare REIT delivered an in-line performance in terms of adjusted FFO per share.
The company beat estimates in two of the trailing four quarters, met the same in one and missed in the other, the average beat being 1.60%. This is depicted in the graph below.
Omega Healthcare Investors, Inc. Price and EPS Surprise
By investing in the long-term healthcare industry, mainly in skilled nursing (SNF) and assisted living facilities, Omega Healthcare has emerged as a leading SNF-focused REIT and achieved diversification in terms of geography and operator in the United States and the United Kingdom.
The company’s properties are operated by a diverse group of healthcare companies, primarily in a triple-net lease structure. This diversification is anticipated to have supported OHI’s top line in the to-be-reported quarter.
However, the nonpayment of the rent by some operators is likely to have affected the company’s performance in the third quarter. In a September 2022 investor presentation, Omega Healthcare noted that in July 2022, it collected the rent from operators representing roughly 92% of its second-quarter 2022 annualized contractual rent and mortgage obligations.
OHI also noted that with many operators still struggling with the pandemic’s impact on occupancy and staffing, there is a high risk that additional operators might not be able to pay per their contractual terms. With low occupancy, the profitability of several facilities is likely to have been affected. These are likely to have pressured the company’s operating performance in the third quarter.
The Zacks Consensus Estimate for the third-quarter rental income is pegged at $216.73 million, up from $207.54 million in the prior quarter but down from $243.58 million in the year-ago period. The consensus mark for third-quarter revenues of $249.8 million suggests an 11.3% decrease year over year.
Omega Healthcare’s activities during the September-end quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has remained unrevised at 77 cents over the past month. The figure also suggests a 9.4% decline year over year.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for OHI this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an FFO beat. However, that’s not the case here.
Omega Healthcare currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks from the broader REIT sector — Public Storage (PSA - Free Report) , Extra Space Storage Inc. (EXR - Free Report) and Host Hotels & Resorts, Inc. (HST - Free Report) — that you may want to consider as our model shows that these have the right combination of elements to report a surprise this 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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What's in Store for Omega Healthcare (OHI) in Q3 Earnings?
Omega Healthcare Investors, Inc. (OHI - Free Report) is slated to report third-quarter 2022 results on Nov 2 after the closing bell. The company’s quarterly results are likely to display a year-over-year decline in revenues and funds from operations (FFO) per share.
In the last reported quarter, this healthcare REIT delivered an in-line performance in terms of adjusted FFO per share.
The company beat estimates in two of the trailing four quarters, met the same in one and missed in the other, the average beat being 1.60%. This is depicted in the graph below.
Omega Healthcare Investors, Inc. Price and EPS Surprise
Omega Healthcare Investors, Inc. price-eps-surprise | Omega Healthcare Investors, Inc. Quote
By investing in the long-term healthcare industry, mainly in skilled nursing (SNF) and assisted living facilities, Omega Healthcare has emerged as a leading SNF-focused REIT and achieved diversification in terms of geography and operator in the United States and the United Kingdom.
The company’s properties are operated by a diverse group of healthcare companies, primarily in a triple-net lease structure. This diversification is anticipated to have supported OHI’s top line in the to-be-reported quarter.
However, the nonpayment of the rent by some operators is likely to have affected the company’s performance in the third quarter. In a September 2022 investor presentation, Omega Healthcare noted that in July 2022, it collected the rent from operators representing roughly 92% of its second-quarter 2022 annualized contractual rent and mortgage obligations.
OHI also noted that with many operators still struggling with the pandemic’s impact on occupancy and staffing, there is a high risk that additional operators might not be able to pay per their contractual terms. With low occupancy, the profitability of several facilities is likely to have been affected. These are likely to have pressured the company’s operating performance in the third quarter.
The Zacks Consensus Estimate for the third-quarter rental income is pegged at $216.73 million, up from $207.54 million in the prior quarter but down from $243.58 million in the year-ago period. The consensus mark for third-quarter revenues of $249.8 million suggests an 11.3% decrease year over year.
Omega Healthcare’s activities during the September-end quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has remained unrevised at 77 cents over the past month. The figure also suggests a 9.4% decline year over year.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for OHI this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an FFO beat. However, that’s not the case here.
Omega Healthcare currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks from the broader REIT sector — Public Storage (PSA - Free Report) , Extra Space Storage Inc. (EXR - Free Report) and Host Hotels & Resorts, Inc. (HST - Free Report) — that you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
Public Storage, slated to release quarterly numbers on Nov 1, has an Earnings ESP of +1.34% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Host Hotels & Resorts, scheduled to report quarterly numbers on Nov 2, currently has an Earnings ESP of +0.71% and carries a Zacks Rank of 3.
Extra Space Storage, slated to report third-quarter earnings on Nov 1, currently has an Earnings ESP of +1.31% and carries a Zacks Rank of 3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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.