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Taubman Centers Inc. reported third-quarter 2020 adjusted funds from operations (AFFO) per share of 60 cents, surpassing the Zacks Consensus Estimate of 58 cents. However, the figure declined 30.2% from the year-ago quarter’s reported figure of 86 cents.
The pandemic-led disruptions, including widespread mall closures, tenant bankruptcies and uncollected rent, resulted in year-over-year declines.
Adjusted revenues (consisting of rental revenues, overage rents, and revenues from management, leasing, and development services for consolidated businesses) were $123.8 million, outpacing the Zacks Consensus Estimate of $119 million. However, the reported figure declined from $147 million reported in third-quarter 2019.
Quarter in Detail
Comparable center net operating income at the company’s beneficial interest (excluding lease cancellation income and using constant foreign exchange rates) slumped 29% year over year. A year-over-year increase in uncollectible tenant revenues resulted in comparable center net operating income decline.
Average rent per square foot in U.S. comparable centers for the quarter was $59.28, marking a 6.4% decrease from the year-ago period’s $63.36. Trailing 12-month sales per square foot in the United States was $790, down 19.4% year over year. In Asia, sales per square foot improved modestly during the third quarter.
As of Sep 30, 2020, leased space in U.S. comparable centers was 92.6%, down 3% from Sep 30, 2019. Additionally, ending occupancy in U.S. comparable centers of 89.9% was down 2.7% year over year at the end of the reported quarter.
Liquidity
Taubman Centers exited third-quarter 2020 with cash and cash equivalents of $256.5 million; up from 102.8 million reported as of December 2019 end.
Total liquidity, including cash on hand and borrowing capacity under its lines of credit, was $455 million at the end of the July-September period, up $90 million from the second quarter.
Conclusion
On Oct 7, 2020, the companyunveiled a shopping center — new Starfield Anseong — in Anseong, Gyeonggi Province, South Korea.
The modern shopping, entertainment and dining destination spans one million square feet of space and is the largest mall in the southern region of Gyeonggi. It opened with more than 90% occupancy and nearly 100% was leased. The company expects occupancy to reach 99% by year-end. Notably, such efforts will attract great retailers, thereby driving traffic and productivity to its centers and enhancing the long-term strategic position of properties.
Moreover, to improve its liquidity position, the company has reduced certain expenditures, thereby preserving cash. In fact, U.S. planned capital expenditures (at the company’s beneficial interest) for 2020 have been reduced by nearly $135 million, indicating a reduction of nearly 65% from the original budget.
Further, Taubman Centers expects 2020 operating expenses to be lowered by $17 million. Additionally, the company suspended common stock dividend payment in the second or third quarter. This too enabled it to save $120 million of cash.
Taubman Centers has a Zacks Rank #4 (Sell) at present.
Iron Mountain Incorporated (IRM - Free Report) reported third-quarter 2020 normalized FFO per share of 61 cents, which beat the Zacks Consensus Estimate of 55 cents. However, the reported figure was 1.5% lower than the year-ago quarter’s 62 cents.
Public Storage's (PSA - Free Report) third-quarter 2020 core FFO per share of $2.63 surpassed the Zacks Consensus Estimate of $2.60. Quarterly revenues of $730.7 million exceeded the Zacks Consensus Estimate $723 million.
Healthpeak Properties, Inc. reported third-quarter 2020 FFO as adjusted of 40 cents per share, surpassing the Zacks Consensus Estimate of 39 cents. However, the reported figure compared unfavorably with FFO as adjusted of 44 cents per share in the prior-year quarter.
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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Taubman Centers (TCO) Q3 FFO Tops Estimates, Revenues Dip Y/Y
Taubman Centers Inc. reported third-quarter 2020 adjusted funds from operations (AFFO) per share of 60 cents, surpassing the Zacks Consensus Estimate of 58 cents. However, the figure declined 30.2% from the year-ago quarter’s reported figure of 86 cents.
The pandemic-led disruptions, including widespread mall closures, tenant bankruptcies and uncollected rent, resulted in year-over-year declines.
Adjusted revenues (consisting of rental revenues, overage rents, and revenues from management, leasing, and development services for consolidated businesses) were $123.8 million, outpacing the Zacks Consensus Estimate of $119 million. However, the reported figure declined from $147 million reported in third-quarter 2019.
Quarter in Detail
Comparable center net operating income at the company’s beneficial interest (excluding lease cancellation income and using constant foreign exchange rates) slumped 29% year over year. A year-over-year increase in uncollectible tenant revenues resulted in comparable center net operating income decline.
Average rent per square foot in U.S. comparable centers for the quarter was $59.28, marking a 6.4% decrease from the year-ago period’s $63.36. Trailing 12-month sales per square foot in the United States was $790, down 19.4% year over year. In Asia, sales per square foot improved modestly during the third quarter.
As of Sep 30, 2020, leased space in U.S. comparable centers was 92.6%, down 3% from Sep 30, 2019. Additionally, ending occupancy in U.S. comparable centers of 89.9% was down 2.7% year over year at the end of the reported quarter.
Liquidity
Taubman Centers exited third-quarter 2020 with cash and cash equivalents of $256.5 million; up from 102.8 million reported as of December 2019 end.
Total liquidity, including cash on hand and borrowing capacity under its lines of credit, was $455 million at the end of the July-September period, up $90 million from the second quarter.
Conclusion
On Oct 7, 2020, the companyunveiled a shopping center — new Starfield Anseong — in Anseong, Gyeonggi Province, South Korea.
The modern shopping, entertainment and dining destination spans one million square feet of space and is the largest mall in the southern region of Gyeonggi. It opened with more than 90% occupancy and nearly 100% was leased. The company expects occupancy to reach 99% by year-end. Notably, such efforts will attract great retailers, thereby driving traffic and productivity to its centers and enhancing the long-term strategic position of properties.
Moreover, to improve its liquidity position, the company has reduced certain expenditures, thereby preserving cash. In fact, U.S. planned capital expenditures (at the company’s beneficial interest) for 2020 have been reduced by nearly $135 million, indicating a reduction of nearly 65% from the original budget.
Further, Taubman Centers expects 2020 operating expenses to be lowered by $17 million. Additionally, the company suspended common stock dividend payment in the second or third quarter. This too enabled it to save $120 million of cash.
Taubman Centers has a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Taubman Centers, Inc. Price, Consensus and EPS Surprise
Taubman Centers, Inc. price-consensus-eps-surprise-chart | Taubman Centers, Inc. Quote
Performance of Other REITs
Iron Mountain Incorporated (IRM - Free Report) reported third-quarter 2020 normalized FFO per share of 61 cents, which beat the Zacks Consensus Estimate of 55 cents. However, the reported figure was 1.5% lower than the year-ago quarter’s 62 cents.
Public Storage's (PSA - Free Report) third-quarter 2020 core FFO per share of $2.63 surpassed the Zacks Consensus Estimate of $2.60. Quarterly revenues of $730.7 million exceeded the Zacks Consensus Estimate $723 million.
Healthpeak Properties, Inc. reported third-quarter 2020 FFO as adjusted of 40 cents per share, surpassing the Zacks Consensus Estimate of 39 cents. However, the reported figure compared unfavorably with FFO as adjusted of 44 cents per share in the prior-year quarter.
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>>