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Simon Property (SPG) Tops Q4 FFO, Guides '23 Below Expectation
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Simon Property Group, Inc.’s (SPG - Free Report) fourth-quarter 2022 comparable funds from operations (FFO) per share of $3.15 exceeded the Zacks Consensus Estimate of $3.14. The figure compares favorably with the year-ago quarter’s $3.11.
This performance was backed by a better-than-expected top line. Results reflect a healthy operating performance and growth in occupancy levels. However, the retail REIT behemoth’s 2023 comparable FFO per share projection was lower than expected.
Simon Property generated revenues of $1.399 billion in the quarter. The figure surpassed the Zacks Consensus Estimate of $1.366 billion and also increased 5.6% year over year.
For the full-year 2022, the comparable FFO per share came in at $11.87, higher than the prior-year tally of $11.44 and also ahead of the Zacks Consensus Estimate of $11.68. This was backed by 3.4% growth in revenues to $5.291 billion.
Behind the Headlines
SPG reported revenues from lease income of $1.29 billion, increasing from the prior-year period’s $1.22 billion. Our estimate for the same was pegged at $1.26 billion.
As of Dec 31, 2022, the occupancy for the U.S. Malls and Premium Outlets portfolio came in at 94.9%, up from the 93.4% witnessed as of Dec 31, 2021. We projected the same at 94.6%.
The base minimum rent per square foot for the U.S. Malls and Premium Outlets portfolio was $55.13 as of Dec 31, 2022, rising from $53.91 as of Dec 31, 2021, reflecting an increase of 2.3%. The figure also surpassed our estimate of $54.82.
Simon Property’s total operating expenses in the fourth quarter were $715.7 million, declining 2.6% from the prior-year quarter. The domestic property net operating income (NOI) increased 5.8% year over year, while the portfolio NOI climbed 6.3%.
Balance Sheet Position
Simon Property exited 2022 with $7.8 billion of liquidity. This comprised $1.3 billion of cash in hand, including its share of joint-venture cash, and $6.5 billion of available capacity under the company’s revolving credit facilities.
Guidance
For 2023, Simon Property projects comparable FFO per share in the range of $11.70-$11.95. This is lower than the Zacks Consensus Estimate of $12.12.
Dividend
Concurrent with its fourth-quarter earnings release, Simon Property announced a quarterly common stock dividend of $1.80 for the first quarter of 2023. The dividend will be paid out on Mar 31, 2023 to shareholders of record on Mar 10, 2023.
We now look forward to the earnings releases of other retail REITs like Federal Realty Investment Trust (FRT - Free Report) , Kimco Realty Corporation (KIM - Free Report) and Regency Centers Corporation (REG - Free Report) . While Federal Realty is slated to report on Feb 8, Kimco Realty and Regency Centers are scheduled to come up with its results on Feb 9.
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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Simon Property (SPG) Tops Q4 FFO, Guides '23 Below Expectation
Simon Property Group, Inc.’s (SPG - Free Report) fourth-quarter 2022 comparable funds from operations (FFO) per share of $3.15 exceeded the Zacks Consensus Estimate of $3.14. The figure compares favorably with the year-ago quarter’s $3.11.
This performance was backed by a better-than-expected top line. Results reflect a healthy operating performance and growth in occupancy levels. However, the retail REIT behemoth’s 2023 comparable FFO per share projection was lower than expected.
Simon Property generated revenues of $1.399 billion in the quarter. The figure surpassed the Zacks Consensus Estimate of $1.366 billion and also increased 5.6% year over year.
For the full-year 2022, the comparable FFO per share came in at $11.87, higher than the prior-year tally of $11.44 and also ahead of the Zacks Consensus Estimate of $11.68. This was backed by 3.4% growth in revenues to $5.291 billion.
Behind the Headlines
SPG reported revenues from lease income of $1.29 billion, increasing from the prior-year period’s $1.22 billion. Our estimate for the same was pegged at $1.26 billion.
As of Dec 31, 2022, the occupancy for the U.S. Malls and Premium Outlets portfolio came in at 94.9%, up from the 93.4% witnessed as of Dec 31, 2021. We projected the same at 94.6%.
The base minimum rent per square foot for the U.S. Malls and Premium Outlets portfolio was $55.13 as of Dec 31, 2022, rising from $53.91 as of Dec 31, 2021, reflecting an increase of 2.3%. The figure also surpassed our estimate of $54.82.
Simon Property’s total operating expenses in the fourth quarter were $715.7 million, declining 2.6% from the prior-year quarter. The domestic property net operating income (NOI) increased 5.8% year over year, while the portfolio NOI climbed 6.3%.
Balance Sheet Position
Simon Property exited 2022 with $7.8 billion of liquidity. This comprised $1.3 billion of cash in hand, including its share of joint-venture cash, and $6.5 billion of available capacity under the company’s revolving credit facilities.
Guidance
For 2023, Simon Property projects comparable FFO per share in the range of $11.70-$11.95. This is lower than the Zacks Consensus Estimate of $12.12.
Dividend
Concurrent with its fourth-quarter earnings release, Simon Property announced a quarterly common stock dividend of $1.80 for the first quarter of 2023. The dividend will be paid out on Mar 31, 2023 to shareholders of record on Mar 10, 2023.
Currently, SPG carries a Zacks Rank #3 (Hold). 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
Upcoming Earnings Releases
We now look forward to the earnings releases of other retail REITs like Federal Realty Investment Trust (FRT - Free Report) , Kimco Realty Corporation (KIM - Free Report) and Regency Centers Corporation (REG - Free Report) . While Federal Realty is slated to report on Feb 8, Kimco Realty and Regency Centers are scheduled to come up with its results on Feb 9.
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.