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Essex Property Trust Inc. (ESS - Free Report) reported fourth-quarter 2023 core funds from operations (FFO) per share of $3.83, beating the Zacks Consensus Estimate of $3.81. The figure also improved 1.6% from the year-ago quarter.
Results reflect favorable growth in same-property revenues and net operating income (NOI). However, the same-property operating expenses partly acted as a dampener. ESS issued first-quarter and full-year 2024 guidance for core FFO per share.
Total revenues of $421.7 million outpaced the Zacks Consensus Estimate of $419.7 million. Revenues were up 1.6% year over year.
For the full-year 2023, the core FFO per share came in at $15.03, higher than the prior-year tally of $14.51, beating the Zacks Consensus Estimate by a penny. This was backed by 3.9% growth in revenues to $1.67 billion.
Quarter in Detail
In the fourth quarter, Essex Property’s same-property revenues increased 2.9% from the prior-year period, below our estimate of 3%. However, same-property operating expenses rose 4.5% year over year versus our estimate of 2.5%.
Consequently, same-property NOI increased 2.3% year over year, below our estimate of 3.2%. Financial occupancies of 96.1% in the fourth quarter expanded 10 basis points (bps) year over year but fell 30 bps sequentially. The metric came below our estimate of 96.2%.
Balance Sheet
Essex Property exited the fourth quarter of 2023 with cash and cash equivalents, including restricted cash, of $400.3 million, up from the $42.7 million recorded at the end of 2022. ESS had $1.6 billion in liquidity through the undrawn capacity on its unsecured credit facilities, cash and cash equivalents and marketable securities as of Feb 2, 2024.
During the fourth quarter, ESS neither issued any shares of common stock through its equity distribution program nor repurchased any shares through its stock repurchase plan. As of Feb 2, 2024, the company had $302.7 million of purchase authority remaining under its stock repurchase plan.
Guidance
For the first quarter of 2024, Essex Property projects core FFO per share in the range of $3.68-$3.80, with the midpoint being $3.74. The Zacks Consensus Estimate is pegged at $3.75.
For the full-year 2024, the company projects the core FFO per share in the range of $14.76-$15.30, with the midpoint being $15.03. The Zacks Consensus Estimate of $15.28 stands within this range.
The full-year guidance is based on projections for the same-property revenue growth of 0.70-2.70%, an operating expense increase of 3.50-5.00% and an NOI expansion of -1.10-2.30%.
Essex Property currently carries a Zacks Rank #3 (Hold).
Essex Property Trust, Inc. Price, Consensus and EPS Surprise
The quarterly results reflect a year-over-year increase in same-store residential rental revenues. AVB's same-store average rental revenue per occupied home reported a rise, though occupancy declined.
Equity Residential (EQR - Free Report) reported a fourth-quarter 2023 normalized FFO per share of $1.00, which was in line with the Zacks Consensus Estimate. The rental income of $727.5 million narrowly missed the consensus mark of $727.6 million.
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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Essex Property (ESS) Q4 FFO & Revenues Beat, '24 View Issued
Essex Property Trust Inc. (ESS - Free Report) reported fourth-quarter 2023 core funds from operations (FFO) per share of $3.83, beating the Zacks Consensus Estimate of $3.81. The figure also improved 1.6% from the year-ago quarter.
Results reflect favorable growth in same-property revenues and net operating income (NOI). However, the same-property operating expenses partly acted as a dampener. ESS issued first-quarter and full-year 2024 guidance for core FFO per share.
Total revenues of $421.7 million outpaced the Zacks Consensus Estimate of $419.7 million. Revenues were up 1.6% year over year.
For the full-year 2023, the core FFO per share came in at $15.03, higher than the prior-year tally of $14.51, beating the Zacks Consensus Estimate by a penny. This was backed by 3.9% growth in revenues to $1.67 billion.
Quarter in Detail
In the fourth quarter, Essex Property’s same-property revenues increased 2.9% from the prior-year period, below our estimate of 3%. However, same-property operating expenses rose 4.5% year over year versus our estimate of 2.5%.
Consequently, same-property NOI increased 2.3% year over year, below our estimate of 3.2%. Financial occupancies of 96.1% in the fourth quarter expanded 10 basis points (bps) year over year but fell 30 bps sequentially. The metric came below our estimate of 96.2%.
Balance Sheet
Essex Property exited the fourth quarter of 2023 with cash and cash equivalents, including restricted cash, of $400.3 million, up from the $42.7 million recorded at the end of 2022. ESS had $1.6 billion in liquidity through the undrawn capacity on its unsecured credit facilities, cash and cash equivalents and marketable securities as of Feb 2, 2024.
During the fourth quarter, ESS neither issued any shares of common stock through its equity distribution program nor repurchased any shares through its stock repurchase plan. As of Feb 2, 2024, the company had $302.7 million of purchase authority remaining under its stock repurchase plan.
Guidance
For the first quarter of 2024, Essex Property projects core FFO per share in the range of $3.68-$3.80, with the midpoint being $3.74. The Zacks Consensus Estimate is pegged at $3.75.
For the full-year 2024, the company projects the core FFO per share in the range of $14.76-$15.30, with the midpoint being $15.03. The Zacks Consensus Estimate of $15.28 stands within this range.
The full-year guidance is based on projections for the same-property revenue growth of 0.70-2.70%, an operating expense increase of 3.50-5.00% and an NOI expansion of -1.10-2.30%.
Essex Property currently carries a Zacks Rank #3 (Hold).
Essex Property Trust, Inc. Price, Consensus and EPS Surprise
Essex Property Trust, Inc. price-consensus-eps-surprise-chart | Essex Property Trust, Inc. Quote
Performance of Other Residential REITs
AvalonBay Communities (AVB - Free Report) reported a fourth-quarter 2023 core FFO per share of $2.74, beating the Zacks Consensus Estimate of $2.73. Moreover, the figure climbed 5.8% from the prior-year quarter’s tally. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The quarterly results reflect a year-over-year increase in same-store residential rental revenues. AVB's same-store average rental revenue per occupied home reported a rise, though occupancy declined.
Equity Residential (EQR - Free Report) reported a fourth-quarter 2023 normalized FFO per share of $1.00, which was in line with the Zacks Consensus Estimate. The rental income of $727.5 million narrowly missed the consensus mark of $727.6 million.
EQR's results reflect healthy same-store revenue performance.
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.