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Federal Realty's (FRT) Q3 FFO Misses, Revenues Rise Y/Y
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Federal Realty Investment Trust (FRT - Free Report) posted third-quarter 2016 funds from operations (“FFO”) per share of $1.41, which missed the Zacks Consensus Estimate by a penny. However, the bottom line came in higher than the prior-year quarter figure of $1.36.
Total revenue for the quarter grew 8.6% year over year to $201.2 million. Further, the top line beat the Zacks Consensus Estimate of $200 million.
Inside the Headlines
During the third quarter, Federal Realty inked 102 lease deals for 452,836 square feet of retail space. As of Sep 30, 2016, the company’s overall portfolio was 94.3% leased, down 120 basis points (bps) year over year.
On a comparable-space basis (spaces for which a former tenant was there), Federal Realty leased 427,021 square feet, at an average cash-basis contractual rent escalation of 14% per square foot. Rent increases (on a GAAP basis) for comparable retail space averaged at 27% per square foot during the quarter.
Same-center property operating income (including redevelopments) improved 1.5% year over year. As of Sep 30, 2016, Federal Realty’s same-center portfolio was 95.5% leased, down 60 bps year over year.
Federal Realty exited the third quarter with cash and cash equivalents of approximately $101.2 million, up from $21 million at the end of 2015.
Dividend Update
Concurrent with the earnings release, Federal Realty declared a quarterly cash dividend of 98 cents per share. The dividend will be paid on Jan 17, 2017 to shareholders on record as of Jan 3, 2017.
Our Take
Federal Realty’s portfolio of Class A shopping centers, along with a diversified tenant base comprising grocery stores and low-end discount retailers, positions it well for growth. However, the rising trend in online shopping through the Internet, mobile phones and tablets has intensified competition and adversely affected demand for retail real estates. Moreover, any rise in rate of interest is a challenge before the company.
Some other REITs which are slated to report results this week are EPR Properties (EPR - Free Report) , National Retail Properties, Inc. (NNN - Free Report) and Lamar Advertising Co. (LAMR - 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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Federal Realty's (FRT) Q3 FFO Misses, Revenues Rise Y/Y
Federal Realty Investment Trust (FRT - Free Report) posted third-quarter 2016 funds from operations (“FFO”) per share of $1.41, which missed the Zacks Consensus Estimate by a penny. However, the bottom line came in higher than the prior-year quarter figure of $1.36.
Total revenue for the quarter grew 8.6% year over year to $201.2 million. Further, the top line beat the Zacks Consensus Estimate of $200 million.
Inside the Headlines
During the third quarter, Federal Realty inked 102 lease deals for 452,836 square feet of retail space. As of Sep 30, 2016, the company’s overall portfolio was 94.3% leased, down 120 basis points (bps) year over year.
On a comparable-space basis (spaces for which a former tenant was there), Federal Realty leased 427,021 square feet, at an average cash-basis contractual rent escalation of 14% per square foot. Rent increases (on a GAAP basis) for comparable retail space averaged at 27% per square foot during the quarter.
Same-center property operating income (including redevelopments) improved 1.5% year over year. As of Sep 30, 2016, Federal Realty’s same-center portfolio was 95.5% leased, down 60 bps year over year.
Federal Realty exited the third quarter with cash and cash equivalents of approximately $101.2 million, up from $21 million at the end of 2015.
Dividend Update
Concurrent with the earnings release, Federal Realty declared a quarterly cash dividend of 98 cents per share. The dividend will be paid on Jan 17, 2017 to shareholders on record as of Jan 3, 2017.
Our Take
Federal Realty’s portfolio of Class A shopping centers, along with a diversified tenant base comprising grocery stores and low-end discount retailers, positions it well for growth. However, the rising trend in online shopping through the Internet, mobile phones and tablets has intensified competition and adversely affected demand for retail real estates. Moreover, any rise in rate of interest is a challenge before the company.
Federal Realty currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Some other REITs which are slated to report results this week are EPR Properties (EPR - Free Report) , National Retail Properties, Inc. (NNN - Free Report) and Lamar Advertising Co. (LAMR - 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>>