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HCP Inc. (HCP) Q2 FFO Beats Estimates, Revenues Lag

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

A FFO Beat

HCP came out with funds from operations (“FFO”) as adjusted of 48 cents per share, beating the Zacks Consensus Estimate of 47 cents.

Results were driven by growth in three-month same property portfolio (SPP) cash net operating income (NOI).

How Was the Earnings Surprise Trend?

HCP has a decent surprise history. Before posting a FFO beat in Q2, the company delivered a positive surprise in each of the trailing four quarters, as shown in the chart below. Overall, the company surpassed the Zacks Consensus Estimate by an average of 4.22% in the trailing four quarters.

HCP, Inc. Price and EPS Surprise

HCP, Inc. Price and EPS Surprise | HCP, Inc. Quote

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

Revenue Came Lower Than Expected

HCP posted revenues of $458.9 million, which missed the Zacks Consensus Estimate of $481.2 million. It also compared unfavorably with the year-ago number of $538.3 million.

Key Developments to Note

During the second quarter and through Aug 1, 2017, HCP announced $75 million of acquisitions. On the other hand, the company generated $399 million of proceeds from dispositions and loan repayments through Aug 1. At quarter end, HCP’s development pipeline totaled $640 million.

HCP has reaffirmed full-year 2017 FFO as adjusted and SPP cash NOI guidance ranges. The company expects full-year 2017 FFO as adjusted per share in the $1.89–$1.95 band. The company anticipates 2017 SPP cash NOI growth in a range of 2.5– 3.5%.

What Zacks Rank Says

HCP currently has a Zacks Rank #3 (Hold). 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.)

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.

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

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