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Welltower (HCN) Q2 FFO and Revenues Beat Estimates

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Have you been eager to see how Welltower Inc. performed in Q2 in comparison with the market expectations? Let’s quickly scan through the key facts from this Toledo, OH-based, healthcare real estate investment trust’s (REIT) earnings release this morning:

A FFO Beat

Welltower came out with normalized funds from operations (“FFO”) per share of $1.06, beating the Zacks Consensus Estimate of $1.05.  

The company experienced solid seniors housing operating performance in the first half of 2017.

How Was the Earnings Surprise Trend?

Welltower has a decent earnings surprise history. Before posting a beat in Q2, the company delivered positive surprise in three out of prior four quarters and in-line results in the other occasion, as shown in the chart below.

Welltower Inc. Price and EPS Surprise

Welltower Inc. Price and EPS Surprise | Welltower Inc. Quote

Overall, the company surpassed the Zacks Consensus Estimate by an average of 0.90% in the trailing four quarters.

Note: The EPS numbers presented in the above chart represent funds from operations (“FFO”) per share.

Revenue Came In Higher Than Expected

Welltower posted revenues of $1.06 billion, which beat the Zacks Consensus Estimate of $1.04 billion. It compared unfavorably with the year-ago number of $1.08 billion.

Key Developments to Note

Welltower has reaffirmed its 2017 normalized FFO per share guidance and expects it to remain in the range of $4.15–$4.25.

Moreover, the company has increased total same store net operating income (SSNOI) guidance to 2.25–3% from the prior outlook of 2–3%, mainly due to better-than-expected seniors housing operating performance in the first half of 2017.

Further, in sync with its strategic repositioning of its premier health care portfolio, the company continues to anticipate 2017 disposition proceeds to be around $2 billion.

What Zacks Rank Says

Welltower has a Zacks Rank #4 (Sell). However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

Check back later for our full write up on this HCN earnings report later!

Note:  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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