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DDR Corp. (DDR) Beats on Q2 Earnings, Raises 2016 Outlook

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DDR Corp.’s second-quarter 2016 funds from operations (“FFO”) per share of 33 cents were higher than both the Zacks Consensus Estimate and the prior-year quarter tally by 2 cents.

Total revenue was $245.9 million, down from $248.9 million recorded in the year-ago quarter. The Zacks Consensus Estimate was pegged at $244 million.

Quarter in Detail

DDR inked 338 new and renewal leases for 2.3 million square feet of space during the reported quarter. The company generated positive leasing spreads, with a 27.7% rise in new leases and renewals up 7% on a pro rata basis. Also, same-store net operating income (“NOI”) climbed 3.1% year over year on a pro rata basis.

As of Jun 30, 2016, the company’s portfolio average annualized base rent per occupied square foot was $14.92, up 3.8% on a year-over-year basis. Further, as of the same date, the company’s portfolio was 96.1% leased, up 30 basis points year over year.

During the quarter, DDR divested 3 assets and 3 land parcels worth $58 million at its share.

DDR exited second-quarter 2016 with $18 million cash compared with $22.4 million as of Dec 31, 2015.

2016 Outlook

DDR has raised its 2016 operating FFO guidance range to $1.23–$1.26 from $1.20–$1.25 anticipated earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.24.

To Conclude

DDR’s solid portfolio of value-oriented shopping centers bodes well for the long term. At the same time, addition of premium assets to the company’s high-end asset pool will not only strengthen its tenant base but also promises steady rental revenues.

However, increasing competition from other retail channels like catalogs and eCommerce websites has become a major concern for this Zacks Rank #3 (Hold) stock.

DDR CORP Price, Consensus and EPS Surprise

DDR CORP Price, Consensus and EPS Surprise | DDR CORP Quote

We now look forward to the earnings releases of Duke Realty Corporation , Kimco Realty Corporation (KIM - Free Report) and Public Storage (PSA - Free Report) which are scheduled this week.

Note: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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