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Why Is Cousins Properties (CUZ) Down 1.8% Since Last Earnings Report?

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A month has gone by since the last earnings report for Cousins Properties (CUZ - Free Report) . Shares have lost about 1.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Cousins Properties due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Cousins Properties' Q2 FFO in Line, Revenues Decline

Cousins Properties reported second-quarter 2018 FFO per share of 15 cents, in line with the Zacks Consensus Estimate. However, the figure came in lower than the prior-year quarter tally of 16 cents.

Cousin Properties’ Q2 revenue figure recorded a marginal decline year over year. Nevertheless, the company witnessed increment in same-property cash net operating income (NOI).

Rental property revenues for the quarter came in at $113.7 million compared with $114 million in the year-ago quarter. Further, the figure missed the Zacks Consensus Estimate of $115 million. Total revenues came in at $116.6 million, lower than $119 million reported in the prior-year period.

Quarter in Detail

Cousins Properties leased or renewed 327,680 square feet of office space in the April-June quarter. Same-property NOI, on a cash basis, rose 4.1% from the year-ago quarter. Moreover, second-generation net rent per square foot (cash basis) increased 13.1%.

During the quarter, the company made a profit of $2.4 million on sale of five acres of land at one of its projects.

Total costs and expenses came in at $105.2 million, down 4.4% from the prior-year quarter.

Cousins Properties exited the second quarter with cash and cash equivalents of $110.2 million, against $108.2 million recorded as of Mar 31, 2018.

2018 Outlook

Cousins Properties reiterated its 2018 FFO per share guidance issued in the fourth quarter of 2017. The company expects FFO for the year to be in the band of 59-63 cents.

Cousins Properties updated its guidance for expenses and gain on land sale.

Management now expects interest and other expenses, net of capitalized interest, in the $47-$49 million range, up from the previous projection of $46-$48 million. General and administrative expenses, net of capitalized salaries, are anticipated in the range of $25.5-$27.5 million. Long-term incentive compensation, based on the company's stock performance, contributed to this increase, from the prior estimate of $24-$26 million.

Furthermore, the company updated its projected figure of gains on sale of land to $2.8 million, which was nil earlier, due to a $2.4 million gain in the reported quarter.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimate flatlined during the past month.

VGM Scores

At this time, Cousins Properties has an average Growth Score of C, however its momentum is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than growth investors.

Outlook

Cousins Properties has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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