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Welltower Inc. , a healthcare real estate investment trust (“REIT”), came up with normalized funds from operations (“FFO”) per share of $1.16 for third-quarter 2016, beating the Zacks Consensus Estimate by a penny. The figure also improved from $1.12 reported in the year-ago quarter.
Results were positively impacted by robust average same store net operating income (“NOI”) growth in the trailing four quarters and investments activities.
The company posted revenues of around $1.08 billion, which beat the Zacks Consensus Estimate of $1.05 billion. Further, it compared favorably with the year-ago number of $979 million.
Quarter in Detail
Same store NOI grew 2.6% year over year. Moreover, same store seniors housing operating occupancy increased 70 basis points to 90.6% with revenues per occupied room growth of 4.0%.
Welltower completed gross investments of $1.4 billion (pro rata basis) in the quarter. This comprised $1.2 billion in acquisitions/joint ventures, $110 million in development funding and $119 million in loans. These investments were completed with existing relationships.
Welltower exited the quarter with cash and cash equivalents of $428.6 million, up from $217.9 million in at the end of 2015. Moreover, as of Sep 30, 2016, the company had $1.7 billion of available borrowing capacity under its primary unsecured credit facility. Further, the company generated around $358 million through its ATM and DRIP programs.
2016 Outlook
For 2016, Welltower revised its normalized FFO per share in a range of $4.50–$4.56 from the previous range of $4.50–$4.60.However, the company raised its 2016 same store cash NOI growth guidance to 3.0–3.25% from the previous guidance of 2.75–3.25%. The Zacks Consensus Estimate for 2016 currently stands at $4.57.
Further, in sync with its strategic repositioning of its premier health care portfolio, the company raised its 2016 disposition guidance from $1.3 billion to $4.1 billion of proceeds.
Our Take
Welltower’s results, supported by a notable operating portfolio performance, encourage us. In addition, a rise in senior citizen expenditure for healthcare promises strong prospects for the company. However, an anticipated rise in interest rate and intense competition remain matters of concern.
Some REITs which are slated to report results later this week include EPR Properties (EPR - Free Report) , Lamar Advertising Co. (LAMR - Free Report) and Federal Realty Investment Trust (FRT - Free Report) .
Note: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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Welltower's (HCN) Q3 FFO, Revenues Top; Revises Guidance
Welltower Inc. , a healthcare real estate investment trust (“REIT”), came up with normalized funds from operations (“FFO”) per share of $1.16 for third-quarter 2016, beating the Zacks Consensus Estimate by a penny. The figure also improved from $1.12 reported in the year-ago quarter.
Results were positively impacted by robust average same store net operating income (“NOI”) growth in the trailing four quarters and investments activities.
The company posted revenues of around $1.08 billion, which beat the Zacks Consensus Estimate of $1.05 billion. Further, it compared favorably with the year-ago number of $979 million.
Quarter in Detail
Same store NOI grew 2.6% year over year. Moreover, same store seniors housing operating occupancy increased 70 basis points to 90.6% with revenues per occupied room growth of 4.0%.
Welltower completed gross investments of $1.4 billion (pro rata basis) in the quarter. This comprised $1.2 billion in acquisitions/joint ventures, $110 million in development funding and $119 million in loans. These investments were completed with existing relationships.
WELLTOWER INC Price, Consensus and EPS Surprise
WELLTOWER INC Price, Consensus and EPS Surprise | WELLTOWER INC Quote
Welltower exited the quarter with cash and cash equivalents of $428.6 million, up from $217.9 million in at the end of 2015. Moreover, as of Sep 30, 2016, the company had $1.7 billion of available borrowing capacity under its primary unsecured credit facility. Further, the company generated around $358 million through its ATM and DRIP programs.
2016 Outlook
For 2016, Welltower revised its normalized FFO per share in a range of $4.50–$4.56 from the previous range of $4.50–$4.60.However, the company raised its 2016 same store cash NOI growth guidance to 3.0–3.25% from the previous guidance of 2.75–3.25%. The Zacks Consensus Estimate for 2016 currently stands at $4.57.
Further, in sync with its strategic repositioning of its premier health care portfolio, the company raised its 2016 disposition guidance from $1.3 billion to $4.1 billion of proceeds.
Our Take
Welltower’s results, supported by a notable operating portfolio performance, encourage us. In addition, a rise in senior citizen expenditure for healthcare promises strong prospects for the company. However, an anticipated rise in interest rate and intense competition remain matters of concern.
Welltower currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some REITs which are slated to report results later this week include EPR Properties (EPR - Free Report) , Lamar Advertising Co. (LAMR - Free Report) and Federal Realty Investment Trust (FRT - Free Report) .
Note: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>