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Why Is Vornado (VNO) Up 2.9% Since Last Earnings Report?
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A month has gone by since the last earnings report for Vornado (VNO - Free Report) . Shares have added about 2.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vornado due for a pullback? 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 drivers.
Vornado Q1 FFO Tops Estimates, Revenues & NOI Down Y/Y
Vornado reported first-quarter 2021 FFO plus assumed conversions as adjusted of 65 cents per share, surpassing the Zacks Consensus Estimate of 63 cents. The reported figure, however, plunged 15.6% year over year.
Lower interest expenses and lower G&A expenses, owing to the overhead reduction program announced in December 2020, aided the bottom line. Yet, a year-over-year decline in NOI in the New York portfolio and theMART affected the company’s quarterly results.
Total revenues were around $380 million in the reported quarter, lagging the Zacks Consensus Estimate of $384.6 million. Also, revenues compared unfavorably with the year-ago number of $444.5 million.
With the exception of grocery stores and other "essential" businesses, Vornado’s numerous retail tenants continue to be impacted by limitations on occupancy and other restrictions, impeding their ability to resume operations fully.
Amid this, the company has continued to agree to rent deferrals and rent abatements for certain tenants. In fact, for the reported quarter, it collected 96% of the rent. This comprised collections of 97% from its office tenants and 90% from retail tenants.
Also, on Apr 5, 2021, Vornado announced the permanent closure of Hotel Pennsylvania.
Behind the Headline Numbers
In the New York portfolio, 208,000 square feet of office space (147,000 square feet at share) and 46,000 square feet of retail space (36,000 square feet at share) were leased in the March-end quarter. Also, 85,000 square feet of area (all at share) was leased at theMart.
At the end of the first quarter, occupancy in the New York portfolio was 91.6%, down from 96.7% at the prior-year quarter end. Occupancy in theMART was 88.9%, significantly down from 91.9% reported as of Mar 31, 2020. Furthermore, occupancy in 555 California Street was 97.8%, down from 99.8% in the prior year.
Moreover, in the reported quarter, total same-store NOI (at share) slipped 8.4% year over year. In fact, same-store NOI at theMART and the New York portfolio declined 12.5% and 8.9%, respectively. Nonetheless, same-store NOI in the company’s 555 California Street improved 4.7%.
As of Mar 31, 2021, the company had $1.64 billion of cash and cash equivalents, up from $1.62 billion reported as of Dec 31, 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Vornado has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Vornado has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Vornado (VNO) Up 2.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Vornado (VNO - Free Report) . Shares have added about 2.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vornado due for a pullback? 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 drivers.
Vornado Q1 FFO Tops Estimates, Revenues & NOI Down Y/Y
Vornado reported first-quarter 2021 FFO plus assumed conversions as adjusted of 65 cents per share, surpassing the Zacks Consensus Estimate of 63 cents. The reported figure, however, plunged 15.6% year over year.
Lower interest expenses and lower G&A expenses, owing to the overhead reduction program announced in December 2020, aided the bottom line. Yet, a year-over-year decline in NOI in the New York portfolio and theMART affected the company’s quarterly results.
Total revenues were around $380 million in the reported quarter, lagging the Zacks Consensus Estimate of $384.6 million. Also, revenues compared unfavorably with the year-ago number of $444.5 million.
With the exception of grocery stores and other "essential" businesses, Vornado’s numerous retail tenants continue to be impacted by limitations on occupancy and other restrictions, impeding their ability to resume operations fully.
Amid this, the company has continued to agree to rent deferrals and rent abatements for certain tenants. In fact, for the reported quarter, it collected 96% of the rent. This comprised collections of 97% from its office tenants and 90% from retail tenants.
Also, on Apr 5, 2021, Vornado announced the permanent closure of Hotel Pennsylvania.
Behind the Headline Numbers
In the New York portfolio, 208,000 square feet of office space (147,000 square feet at share) and 46,000 square feet of retail space (36,000 square feet at share) were leased in the March-end quarter. Also, 85,000 square feet of area (all at share) was leased at theMart.
At the end of the first quarter, occupancy in the New York portfolio was 91.6%, down from 96.7% at the prior-year quarter end. Occupancy in theMART was 88.9%, significantly down from 91.9% reported as of Mar 31, 2020. Furthermore, occupancy in 555 California Street was 97.8%, down from 99.8% in the prior year.
Moreover, in the reported quarter, total same-store NOI (at share) slipped 8.4% year over year. In fact, same-store NOI at theMART and the New York portfolio declined 12.5% and 8.9%, respectively. Nonetheless, same-store NOI in the company’s 555 California Street improved 4.7%.
As of Mar 31, 2021, the company had $1.64 billion of cash and cash equivalents, up from $1.62 billion reported as of Dec 31, 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Vornado has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Vornado has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.