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Federal Realty (FRT) Q3 FFO & Revenues Top Estimates, View Up

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Retail REIT — Federal Realty Investment Trust (FRT - Free Report) — posted third-quarter 2018 funds from operations (FFO) per share of $1.58, beating the Zacks Consensus Estimate of $1.55. Also, the reported figure compares favorably with the prior-year quarter tally of $1.50.

Results reflect growth in revenues. The company experienced rise in property operating income and lease rollover for comparable properties. It also raised its guidance for 2018.

Total revenues for the quarter grew 5.4% year over year to $229.8 million. Moreover, the top line surpassed the Zacks Consensus Estimate of $228.5 million.

Quarter in Details

During the reported quarter, Federal Realty signed 101 leases for 469,214 square feet of retail space. On a comparable space basis, the company leased 447,765 square feet at an average rent of $38.31 per square foot. This denoted cash-basis rollover growth of 6%.

As of Sep 30, 2018, the company’s overall portfolio was 94.8% leased, slightly down from 94.9% as on Sep 30, 2017. Comparable property portfolio was 95.2% leased as of Sep 30, 2018, down from 95.4% as on Sep 30, 2017.

In addition, property operating income (POI) for comparable properties climbed 3.5% for the third quarter.

Federal Realty exited third-quarter 2018 with cash and cash equivalents of approximately $41.9 million, significantly up from $15.2 million posted at the end of 2017.

Outlook Raised

For 2018, Federal Realty raised its FFO per share guidance to $6.18-$6.24 from the previous outlook of $6.13-$6.23. The Zacks Consensus Estimate for the same is currently pinned at $6.19, which is within the company’s guided range.

Dividend Update

Federal Realty announced a quarterly cash dividend of $1.02 per share. The dividend will be paid on Jan 15, 2019, to shareholders on record as of Jan 2, 2019.

Our Take

Federal Realty’s better-than-expected third-quarter performance in terms of FFO per share is encouraging. The company’s premium retail real estate assets, diverse tenant base and focus on mixed used properties position it for long-term growth. In addition, its robust balance sheet offers scope for growth, moving ahead. Also, it has enabled the company to hike dividends for 51 consecutive years.

Nevertheless, shrinking footfall at malls amid shift of consumers toward online channels, store closures and bankruptcy of retailers will likely continue to dampen the performance of this retail REIT in the near future. Furthermore, rate hike adds to its woes.

Federal Realty currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Federal Realty Investment Trust Price, Consensus and EPS Surprise
 

Federal Realty Investment Trust Price, Consensus and EPS Surprise | Federal Realty Investment Trust Quote

We, now, look forward to the earnings releases of Lamar Advertising Company (LAMR - Free Report) , Host Omega Healthcare Investors, Inc. (OHI - Free Report) and Outfront Media Inc. (OUT - Free Report) , all of which are scheduled to report their quarterly numbers next week.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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