Friday, October 28, 2016 11:33:33 AM
October 26, 2016
http://finance.yahoo.com/news/equity-residential-eqr-q3-ffo-131701882.html
Equity Residential EQR came up with third-quarter 2016 normalized funds from operations (“FFO”) per share of 78 cents, in line with the Zacks Consensus Estimate. However, it was down from 89 cents reported in the year-ago quarter.
Results reflected the adverse impact on net operating income (“NOI”), stemming from the company’s 2016 huge disposition activity. However, the negative was partly mitigated by enhanced NOI from same-store properties and non-same store properties currently in lease-up. Moreover, the company’s total interest expense declined due to lower debt balances.
According to the company, demand for rental units in urban and high density, close-in suburban markets has been high. However, increasing new apartment supply, along with a slowdown in high-paying jobs, are anticipated to put pressure on rental rates, thereby adversely affecting the company’s revenue growth this year.
Total revenue during the reported quarter was $606.1 million, reflecting a 13.0% decline from the prior-year period. However, the figure managed to beat the Zacks Consensus Estimate of $599 million.
Quarter in Detail
Same-store revenues (includes 72,229 apartment units) increased 3.4% year over year to $563.9 million and expenses climbed 5.9% from a year ago to $168.7 million. As a result, same-store NOI grew 2.4% year over year to $395.2 million.
The company experienced a 3.4% increase in average rental rates to $2,602, while occupancy contracted 20 basis points year over year to 96.0% for the same-store portfolio.
It exited third-quarter 2016 with cash and cash equivalents of $517.6 million, up from $497.8 million at the end of the prior quarter.
Portfolio Activity
During the third quarter, Equity Residential purchased a 94-unit apartment property in Los Angeles for around $45.2 million. On the other hand, the company sold eight consolidated apartment properties for approximately $140.6 million. During the quarter, the company also sold a land parcel in Berkeley, California for $30.0 million, along with an unconsolidated property in Atlanta and received around $12.4 million for its 20% stake.
Further, during the quarter, the company stabilized three development properties. This included 170 Amsterdam in New York, Azure in San Francisco and Odin in Seattle, at a weighted average projected yield of 5.8%.
Outlook
Equity Residential has revised its 2016 guidance and expects normalized FFO per share in the $3.06–$3.10 range against the prior guidance of $3.05–$3.11. The Zacks Consensus Estimate of $3.07 falls within this range.
For the same-store portfolio, the company expects physical occupancy to be 96.0%, compared to the prior outlook of 95.9%; revenue to register growth of 3.6–3.9% compared with 3.5–4.0% increase predicted earlier and NOI to climb 3.8–4.1%, compared with the previous guided range of 3.75–4.25%.
For fourth-quarter 2016, the company projects normalized FFO per share in the range of 77–81 cents. The Zacks Consensus Estimate is currently pegged at 79 cents.
Our Viewpoint
Going forward, the company is expected to benefit from its portfolio-repositioning efforts, growth in the millennial population, lifestyle transformation and creation of new households, though huge asset dispositions and elevated deliveries remain headwinds.
The company currently carries a Zacks Rank #2 (Buy).
"Then there was a woman, a lion of a woman."
Recent EQR News
- Equity Residential Declares Third Quarter Dividends • Business Wire • 09/13/2024 08:15:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/10/2024 08:33:09 PM
- Equity Residential to Participate in Bank of America 2024 Global Real Estate Conference • Business Wire • 09/09/2024 08:15:00 PM
- Equity Residential Provides Operating Update • Business Wire • 09/04/2024 08:15:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/29/2024 08:19:38 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 08/28/2024 05:54:11 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/23/2024 08:16:36 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/23/2024 08:13:31 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/23/2024 08:10:38 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 08/21/2024 03:44:52 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 08/21/2024 02:21:43 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/16/2024 08:09:42 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/09/2024 08:10:17 PM
- Intel Sued by Shareholders; JPMorgan Raises Chance of Recession; Roblox Blocked in Turkey; Micron Resumes Share Buyback • IH Market News • 08/08/2024 09:48:43 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 08/07/2024 05:08:33 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/07/2024 01:05:42 PM
- Equity Residential to Acquire $1 Billion Apartment Portfolio from Blackstone Real Estate • Business Wire • 08/07/2024 01:01:00 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/01/2024 08:15:42 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/29/2024 08:40:34 PM
- Equity Residential Reports Second Quarter 2024 Results • Business Wire • 07/29/2024 08:30:00 PM
- Harbor Steps Staircase Plaza Grand Reopening • Business Wire • 07/19/2024 09:57:00 PM
- Equity Residential Announces Second Quarter 2024 Earnings Release Date • Business Wire • 07/02/2024 09:00:00 PM
- Equity Residential Declares Second Quarter Dividends • Business Wire • 06/20/2024 08:15:00 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 06/13/2024 09:41:16 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/04/2024 08:09:08 PM
FEATURED Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM
North Bay Resources Announces Mt. Vernon Gold Mine Bulk Sample, Sierra County, California • NBRI • Sep 11, 2024 9:15 AM
One World Products Issues Shareholder Update Letter • OWPC • Sep 11, 2024 7:27 AM
Kona Gold Beverage Inc. Reports $1.225 Million in Revenue and $133,000 Net Profit for the Quarter • KGKG • Sep 10, 2024 1:30 PM