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Ventas, Inc. (VTR - Free Report) reported fourth-quarter 2019 normalized funds from operations (FFO) per share of 93 cents, beating the Zacks Consensus Estimate of 92 cents. However, the figure comes in lower than the year-ago tally of 96 cents.
Results reflect solid performance of its Medical Office, Healthcare and Research & Innovation (R&I) portfolios, though the Senior Housing business faced a choppy market environment.
The company generated revenues of around $996 million in the fourth quarter, which surpassed the Zacks Consensus Estimate of $979.5 million. The top line also compares favorably with the year-ago number of $923.3 million.
For full-year 2019, the company reported normalized FFO per share of $3.85, down 5.4% from the prior year’s $4.07. Revenues for the full year also climbed 3.4% year on year to $3.87 billion.
Quarter in Detail
For the fourth quarter, same-store cash net operating income (NOI) growth for the total property portfolio (1,102 assets) edged down 0.6% year over year. Segment wise, though same-store cash NOI for the triple-net leased portfolio grew 2.1% and the office portfolio rose 3.8%, the senior housing operating properties (SHOP) portfolio reported a decline of 7.5%, year on year.
Notably, the same-store SHOP NOI performance in the fourth quarter reflects the cumulative impact of new competition that affected SHOP occupancy and rate. Nevertheless, same-store growth of the triple-net leased portfolio was driven by in-place lease escalations, specifically in its growing triple-net leased healthcare portfolio of acute and post-acute assets. Moreover, solid growth of the office portfolio was fueled by Ventas’ university-based R&I portfolio and healthy growth in its Medical Office Building (MOB) portfolio.
Liquidity
Ventas exited fourth-quarter 2019 with cash and cash equivalents of $106.4 million, up from the $148.1 million recorded as of the prior-quarter end. In addition, the company’s available liquidity from cash on hand and existing credit facilities aggregated $2.6 billion, net of $567 million of outstanding commercial paper at the end of 2019.
Outlook
Ventas expects its 2020 normalized FFO per share of $3.56-$3.69. The 2020 Nareit FFO per share is projected at $3.79-$3.94. The Zacks Consensus Estimate for the same is pinned at $3.72.
The full-year projection of the company is backed by same-store cash NOI growth assumption of a 1.5-2.5% year-over-year increase for the tripple-net leased portfolio and a 3-4% jump for the office portfolio. However, the company expects a 4-9% decline for the SHOP portfolio, reflecting lower occupancy start point in January 2020 as well as the impact of cumulative supply.
We, now, look forward to the earnings releases of other REITs like Public Storage (PSA - Free Report) , American Tower Corporation (AMT - Free Report) and Mack-Cali Realty Corporation , all of which are slated to report their quarterly numbers next week.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Ventas (VTR) Q4 FFO Beats Estimates, Revenues Improve Y/Y
Ventas, Inc. (VTR - Free Report) reported fourth-quarter 2019 normalized funds from operations (FFO) per share of 93 cents, beating the Zacks Consensus Estimate of 92 cents. However, the figure comes in lower than the year-ago tally of 96 cents.
Results reflect solid performance of its Medical Office, Healthcare and Research & Innovation (R&I) portfolios, though the Senior Housing business faced a choppy market environment.
The company generated revenues of around $996 million in the fourth quarter, which surpassed the Zacks Consensus Estimate of $979.5 million. The top line also compares favorably with the year-ago number of $923.3 million.
For full-year 2019, the company reported normalized FFO per share of $3.85, down 5.4% from the prior year’s $4.07. Revenues for the full year also climbed 3.4% year on year to $3.87 billion.
Quarter in Detail
For the fourth quarter, same-store cash net operating income (NOI) growth for the total property portfolio (1,102 assets) edged down 0.6% year over year. Segment wise, though same-store cash NOI for the triple-net leased portfolio grew 2.1% and the office portfolio rose 3.8%, the senior housing operating properties (SHOP) portfolio reported a decline of 7.5%, year on year.
Notably, the same-store SHOP NOI performance in the fourth quarter reflects the cumulative impact of new competition that affected SHOP occupancy and rate. Nevertheless, same-store growth of the triple-net leased portfolio was driven by in-place lease escalations, specifically in its growing triple-net leased healthcare portfolio of acute and post-acute assets. Moreover, solid growth of the office portfolio was fueled by Ventas’ university-based R&I portfolio and healthy growth in its Medical Office Building (MOB) portfolio.
Liquidity
Ventas exited fourth-quarter 2019 with cash and cash equivalents of $106.4 million, up from the $148.1 million recorded as of the prior-quarter end. In addition, the company’s available liquidity from cash on hand and existing credit facilities aggregated $2.6 billion, net of $567 million of outstanding commercial paper at the end of 2019.
Outlook
Ventas expects its 2020 normalized FFO per share of $3.56-$3.69. The 2020 Nareit FFO per share is projected at $3.79-$3.94. The Zacks Consensus Estimate for the same is pinned at $3.72.
The full-year projection of the company is backed by same-store cash NOI growth assumption of a 1.5-2.5% year-over-year increase for the tripple-net leased portfolio and a 3-4% jump for the office portfolio. However, the company expects a 4-9% decline for the SHOP portfolio, reflecting lower occupancy start point in January 2020 as well as the impact of cumulative supply.
Ventas currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ventas, Inc. Price, Consensus and EPS Surprise
Ventas, Inc. price-consensus-eps-surprise-chart | Ventas, Inc. Quote
We, now, look forward to the earnings releases of other REITs like Public Storage (PSA - Free Report) , American Tower Corporation (AMT - Free Report) and Mack-Cali Realty Corporation , all of which are slated to report their quarterly numbers next week.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>