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Realty Income (O) Q4 AFFO Miss Estimates, Revenues Rise Y/Y
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Realty Income Corporation’s (O) fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $1.01 missed the Zacks Consensus Estimate by a penny. The reported figure also compared favorably with the prior-year quarter’s $1.00.
Results display a fall in portfolio occupancy despite year-over-year growth in the top line. The company benefited from expansionary effects and a healthy pipeline of opportunities globally. It also issued an outlook for 2024.
Total revenues were $1.08 billion, which missed the Zacks Consensus Estimate of $1.05 billion. The top line rose 21.1% year over year.
In 2023, Realty Income reported AFFO per share of $4.00, up from $3.92 in the year-ago period. The figure, however, missed the Zacks Consensus Estimate of $4.01. Revenues of $4.08 billion jumped 22% year over year and outpaced the consensus mark of $4.05 billion.
Concurrent with its fourth-quarter earnings release, Realty Income closed the merger with Spirit Realty Capital, Inc. in an all-stock transaction.
Quarter in Detail
In the fourth quarter, same-store rental revenues of $713.5 million from 10,498 properties under lease witnessed a rise of 2.6% from the prior-year period.
The portfolio occupancy of 98.6% as of Dec 31, 2023, declined 20 basis points (bps) sequentially and 40 bps year over year. In the reported quarter, the company achieved a rent recapture rate of 103.6% on re-leasing activity.
In the reported quarter, O invested $2.73 billion in 328 properties and properties under development or expansion.
Balance Sheet
Realty Income exited fourth-quarter 2023 with $4.1 billion of liquidity. This comprised cash and cash equivalents of $232.9 million, unsettled At-The-Market forward equity of $337.8 million, and $3.5 billion of availability under its revolving credit facility after deducting $764.4 million in commercial paper borrowings.
Net debt to annualized pro-forma adjusted EBITDAre was 5.5X.
In the fourth quarter, the company raised $1.6 billion from the sale of its common stock at a weighted average price of $56.25 per share, mainly through its At-The-Market program.
2024 Guidance
Realty Income issued its outlook for 2024.
Management projects 2024 AFFO per share of $4.13-$4.21. The Zacks Consensus Estimate is pegged at $4.20.
Full-year projections assume same-store rent growth of approximately 1% and occupancy of more than 98%. O expects a full-year acquisition volume of approximately $2 billion.
Realty Income Corporation Price, Consensus and EPS Surprise
Federal Realty Investment Trust’s (FRT - Free Report) fourth-quarter 2023 funds from operations (FFO) per share of $1.64 was in line with the Zacks Consensus Estimate. This marked a rise of 3.8% from the year-ago quarter’s tally of $1.58.
Results reflect a rise in revenues and healthy leasing activity that aided FRT’s fourth-quarter performance. However, lower occupancy levels affected the results to some extent. This retail REIT also provided an outlook for 2024.
Simon Property Group, Inc.'s (SPG - Free Report) fourth-quarter 2023 FFO per share of $3.69 surpassed the Zacks Consensus Estimate of $3.34. Also, the figure increased 8.5% year over year.
SPG’s results reflect better-than-anticipated revenues on lower property operating expenses and a rise in the base rent per square foot and occupancy levels. However, higher interest expenses partly offset the upsides. This retail behemoth’s 2024 FFO per share outlook was lower than expected.
Kimco Realty Corp. (KIM - Free Report) reported fourth-quarter 2023 FFO per share of 39 cents, in line with the Zacks Consensus Estimate. The figure was only a cent higher than the year-ago quarter’s tally.
Though KIM reported growth in revenues, a rise in interest expenses acted as a dampener. This retail REIT provided an initial outlook for 2024 FFO per share, which is below the consensus mark.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.
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Realty Income (O) Q4 AFFO Miss Estimates, Revenues Rise Y/Y
Realty Income Corporation’s (O) fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $1.01 missed the Zacks Consensus Estimate by a penny. The reported figure also compared favorably with the prior-year quarter’s $1.00.
Results display a fall in portfolio occupancy despite year-over-year growth in the top line. The company benefited from expansionary effects and a healthy pipeline of opportunities globally. It also issued an outlook for 2024.
Total revenues were $1.08 billion, which missed the Zacks Consensus Estimate of $1.05 billion. The top line rose 21.1% year over year.
In 2023, Realty Income reported AFFO per share of $4.00, up from $3.92 in the year-ago period. The figure, however, missed the Zacks Consensus Estimate of $4.01. Revenues of $4.08 billion jumped 22% year over year and outpaced the consensus mark of $4.05 billion.
Concurrent with its fourth-quarter earnings release, Realty Income closed the merger with Spirit Realty Capital, Inc. in an all-stock transaction.
Quarter in Detail
In the fourth quarter, same-store rental revenues of $713.5 million from 10,498 properties under lease witnessed a rise of 2.6% from the prior-year period.
The portfolio occupancy of 98.6% as of Dec 31, 2023, declined 20 basis points (bps) sequentially and 40 bps year over year. In the reported quarter, the company achieved a rent recapture rate of 103.6% on re-leasing activity.
In the reported quarter, O invested $2.73 billion in 328 properties and properties under development or expansion.
Balance Sheet
Realty Income exited fourth-quarter 2023 with $4.1 billion of liquidity. This comprised cash and cash equivalents of $232.9 million, unsettled At-The-Market forward equity of $337.8 million, and $3.5 billion of availability under its revolving credit facility after deducting $764.4 million in commercial paper borrowings.
Net debt to annualized pro-forma adjusted EBITDAre was 5.5X.
In the fourth quarter, the company raised $1.6 billion from the sale of its common stock at a weighted average price of $56.25 per share, mainly through its At-The-Market program.
2024 Guidance
Realty Income issued its outlook for 2024.
Management projects 2024 AFFO per share of $4.13-$4.21. The Zacks Consensus Estimate is pegged at $4.20.
Full-year projections assume same-store rent growth of approximately 1% and occupancy of more than 98%. O expects a full-year acquisition volume of approximately $2 billion.
Realty Income Corporation Price, Consensus and EPS Surprise
Realty Income Corporation price-consensus-eps-surprise-chart | Realty Income Corporation Quote
Realty Income 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 Retail REITs
Federal Realty Investment Trust’s (FRT - Free Report) fourth-quarter 2023 funds from operations (FFO) per share of $1.64 was in line with the Zacks Consensus Estimate. This marked a rise of 3.8% from the year-ago quarter’s tally of $1.58.
Results reflect a rise in revenues and healthy leasing activity that aided FRT’s fourth-quarter performance. However, lower occupancy levels affected the results to some extent. This retail REIT also provided an outlook for 2024.
Simon Property Group, Inc.'s (SPG - Free Report) fourth-quarter 2023 FFO per share of $3.69 surpassed the Zacks Consensus Estimate of $3.34. Also, the figure increased 8.5% year over year.
SPG’s results reflect better-than-anticipated revenues on lower property operating expenses and a rise in the base rent per square foot and occupancy levels. However, higher interest expenses partly offset the upsides. This retail behemoth’s 2024 FFO per share outlook was lower than expected.
Kimco Realty Corp. (KIM - Free Report) reported fourth-quarter 2023 FFO per share of 39 cents, in line with the Zacks Consensus Estimate. The figure was only a cent higher than the year-ago quarter’s tally.
Though KIM reported growth in revenues, a rise in interest expenses acted as a dampener. This retail REIT provided an initial outlook for 2024 FFO per share, which is below the consensus mark.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.