We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Digital Realty (DLR) Q1 FFO Beats, Revenues Increase Y/Y
Read MoreHide Full Article
Digital Realty Trust (DLR - Free Report) reported first-quarter 2023 core funds from operations (FFO) per share of $1.66, beating the Zacks Consensus Estimate by a whisker. The figure, however, fell short of the year-ago quarter’s $1.67.
The company experienced year-over-year growth in operating revenues during the quarter. However, rising rental property operating expenses acted as a dampener. DLR maintained its guidance for 2023 core FFO per share but lowered its expectations for full-year revenues.
The company registered operating revenues of $1.34 billion in the first quarter, increasing 18.8% year over year. However, the same missed the Zacks Consensus Estimate by 1.73%. Rental property operating expenses flared up 15.7% from the prior-year quarter, while total operating expenses increased 17.8%.
Adjusted EBITDA of $667.8 million in the quarter marked a 10.7% increase year over year.
Quarter in Detail
In the reported quarter, signed total bookings were estimated to generate $83 million of annualized GAAP rental revenues, including a $34 million contribution from the 0-1 megawatt category and a record $14 million contribution from interconnection. The weighted-average lag between the new leases signed in the first quarter and the contractual commencement date was 16 months.
Digital Realty signed renewal leases, marking $155 million of annualized GAAP rental revenues during the January-March quarter. Rental rates on renewal leases signed during the quarter jumped 4.5% on a cash basis and rose 6.4% on a GAAP basis.
In the reported quarter, MC Digital Realty acquired a three-acre land parcel in Osaka, Japan, for ¥950 million or $7 million. The parcel can support up to 24MW of IT load.
Balance Sheet
Digital Realty exited the first quarter with cash and cash equivalents of $131.4 million, down from the $141.8 million recorded as of Dec 31, 2022.
As of Mar 31, 2023, this data center REIT had $17.9 billion of total debt outstanding, of which $17.3 billion was unsecured debt and $0.6 billion was secured debt and other. As of the same date, its net debt-to-adjusted EBITDA was 7.1X, while the fixed charge coverage was 4.4X.
2023 Guidance Revised
Digital Realty maintained its guidance for 2023 core FFO per share in the range of $6.65-$6.75. The Zacks Consensus Estimate is currently pegged at $6.75, within the guided range.
However, DLR now projects total revenues in the band of $5.5-$5.6 billion, which is lower than the prior-guided range of $5.7-$5.8 billion. The consensus mark is pegged at $5.75 billion, ahead of the guided range.
Adjusted EBITDA remains unchanged in the range of $2.675-$2.725 billion.
This data center REIT retained its projections for rental rates on renewal leases, which is expected to be greater than 3.0% on both cash and GAAP basis, and year-end portfolio occupancy between 85% and 86%. The same-capital cash NOI is estimated to grow 3-4%, marking no change from the prior-guided range.
Crown Castle Inc. (CCI - Free Report) reported first-quarter 2023 AFFO per share of $1.91, lagging the Zacks Consensus Estimate of $1.94. The figure, however, compared favorably with the year-ago period’s $1.87. Our estimate for the same was pegged at $1.98.
Higher operating expenses in the quarter were a deterrent. Nonetheless, the rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. The company maintained its outlook for 2023.
American Tower Corporation (AMT - Free Report) reported first-quarter 2023 AFFO per share, attributable to AMT common stockholders, of $2.54, beating the Zacks Consensus Estimate of $2.38. The figure also surpassed our estimate of $2.44.
Results reflected improving revenues across its Property segment. American Tower recorded healthy year-over-year organic tenant billings growth of 6.4% and total tenant billings growth of 7.3%. It also revised its 2023 outlook.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported first-quarter 2023 AFFO per share of $2.19, surpassing the Zacks Consensus Estimate of $2.15. The reported figure climbed 6.8% from the year-ago quarter’s tally. We estimated AFFO per share for the quarter to be $2.14.
ARE’s results reflected better-than-anticipated revenues on healthy leasing activity and solid rental rate growth.
Note: Anything related to earnings presented in this write-up represent FFO — a widely used metric to gauge the performance of REITs.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Digital Realty (DLR) Q1 FFO Beats, Revenues Increase Y/Y
Digital Realty Trust (DLR - Free Report) reported first-quarter 2023 core funds from operations (FFO) per share of $1.66, beating the Zacks Consensus Estimate by a whisker. The figure, however, fell short of the year-ago quarter’s $1.67.
The company experienced year-over-year growth in operating revenues during the quarter. However, rising rental property operating expenses acted as a dampener. DLR maintained its guidance for 2023 core FFO per share but lowered its expectations for full-year revenues.
The company registered operating revenues of $1.34 billion in the first quarter, increasing 18.8% year over year. However, the same missed the Zacks Consensus Estimate by 1.73%. Rental property operating expenses flared up 15.7% from the prior-year quarter, while total operating expenses increased 17.8%.
Adjusted EBITDA of $667.8 million in the quarter marked a 10.7% increase year over year.
Quarter in Detail
In the reported quarter, signed total bookings were estimated to generate $83 million of annualized GAAP rental revenues, including a $34 million contribution from the 0-1 megawatt category and a record $14 million contribution from interconnection. The weighted-average lag between the new leases signed in the first quarter and the contractual commencement date was 16 months.
Digital Realty signed renewal leases, marking $155 million of annualized GAAP rental revenues during the January-March quarter. Rental rates on renewal leases signed during the quarter jumped 4.5% on a cash basis and rose 6.4% on a GAAP basis.
In the reported quarter, MC Digital Realty acquired a three-acre land parcel in Osaka, Japan, for ¥950 million or $7 million. The parcel can support up to 24MW of IT load.
Balance Sheet
Digital Realty exited the first quarter with cash and cash equivalents of $131.4 million, down from the $141.8 million recorded as of Dec 31, 2022.
As of Mar 31, 2023, this data center REIT had $17.9 billion of total debt outstanding, of which $17.3 billion was unsecured debt and $0.6 billion was secured debt and other. As of the same date, its net debt-to-adjusted EBITDA was 7.1X, while the fixed charge coverage was 4.4X.
2023 Guidance Revised
Digital Realty maintained its guidance for 2023 core FFO per share in the range of $6.65-$6.75. The Zacks Consensus Estimate is currently pegged at $6.75, within the guided range.
However, DLR now projects total revenues in the band of $5.5-$5.6 billion, which is lower than the prior-guided range of $5.7-$5.8 billion. The consensus mark is pegged at $5.75 billion, ahead of the guided range.
Adjusted EBITDA remains unchanged in the range of $2.675-$2.725 billion.
This data center REIT retained its projections for rental rates on renewal leases, which is expected to be greater than 3.0% on both cash and GAAP basis, and year-end portfolio occupancy between 85% and 86%. The same-capital cash NOI is estimated to grow 3-4%, marking no change from the prior-guided range.
Currently, DLR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Digital Realty Trust, Inc. Price, Consensus and EPS Surprise
Digital Realty Trust, Inc. price-consensus-eps-surprise-chart | Digital Realty Trust, Inc. Quote
Performance of Other REITs
Crown Castle Inc. (CCI - Free Report) reported first-quarter 2023 AFFO per share of $1.91, lagging the Zacks Consensus Estimate of $1.94. The figure, however, compared favorably with the year-ago period’s $1.87. Our estimate for the same was pegged at $1.98.
Higher operating expenses in the quarter were a deterrent. Nonetheless, the rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. The company maintained its outlook for 2023.
American Tower Corporation (AMT - Free Report) reported first-quarter 2023 AFFO per share, attributable to AMT common stockholders, of $2.54, beating the Zacks Consensus Estimate of $2.38. The figure also surpassed our estimate of $2.44.
Results reflected improving revenues across its Property segment. American Tower recorded healthy year-over-year organic tenant billings growth of 6.4% and total tenant billings growth of 7.3%. It also revised its 2023 outlook.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported first-quarter 2023 AFFO per share of $2.19, surpassing the Zacks Consensus Estimate of $2.15. The reported figure climbed 6.8% from the year-ago quarter’s tally. We estimated AFFO per share for the quarter to be $2.14.
ARE’s results reflected better-than-anticipated revenues on healthy leasing activity and solid rental rate growth.
Note: Anything related to earnings presented in this write-up represent FFO — a widely used metric to gauge the performance of REITs.