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Kimco (KIM) Q2 FFO & Revenues Beat Estimates, Outlook Revised
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Kimco Realty Corp. (KIM - Free Report) reported second-quarter 2024 funds from operations (FFO) per share of 41 cents, which beat the Zacks Consensus Estimate of 40 cents. The reported figure grew 5.1% from the year-ago quarter’s tally.
Though Kimco reported growth in revenues, a rise in interest expenses acted as a dampener.
This retail REIT clocked in revenues of $500.2 million, which topped the consensus mark of $496.9 million. Moreover, the figure improved 13% year over year.
According to Conor Flynn, CEO of Kimco, "Our ability to report strong growth reflects the quality of our open-air, grocery-anchored portfolio and further validates our investment thesis for the RPT acquisition. We see these positive trends continuing, and with $63 million of future cash flow from signed leases that have yet to commence paying rent, we are comfortable raising our full-year outlook.”
Quarter in Detail
Pro-rata portfolio occupancy at the end of the second quarter was 96.2%, reflecting an expansion of 40 basis points (bps) year over year and 20 bps sequentially.
Pro-rata anchor occupancy ended the quarter at 98.1%, reflecting an expansion of 40 bps year over year and 30 bps from the previous quarter. Pro-rata small shop occupancy ended the quarter at 91.7%, representing an uptick of 40 bps year over year and 20 bps sequentially.
Kimco executed 482 leases, aggregating 2.3 million square feet in the quarter. Blended pro-rata cash rent spreads on comparable spaces generated was 11.7%, with pro-rata cash rent spreads for new leases climbing 26.3%, and renewals and options rising 9%.
Same-property net operating income (NOI) grew 3% year over year to $377.7 million, backed by a rise in the minimum rent of 3.4%.
Interest expenses were up 20.9% year over year to $73.3 million in the reported quarter.
Portfolio Activity
During the quarter, Kimco invested $168 million under Kimco’s Structured Investment Program, including an additional $146.2 million investment in The Rim, a mixed-use lifestyle center located in San Antonio.
In the reported quarter, Kimco sold two properties and one land parcel for $49.2 million. The company’s pro-rata share of the sales was $7.9 million.
Balance Sheet Position
This retail REIT exited the second quarter of 2024 with $1.9 billion of immediate liquidity. This included $1.78 billion available on its $2.0 billion revolving credit facility and $127.6 million of cash and cash equivalents.
Its net-debt-to-EBITDA was 5.8X on a look-through basis as of Jun 30, 2024, down from 5.9X witnessed in the prior-year quarter.
Dividend Update
Concurrent with the second-quarter earnings release, Kimco’s board of directors declared a quarterly cash dividend of 24 cents per share. This dividend will be paid out on Sep 19 to its shareholders of record as of Sep 5, 2024.
2024 Guidance
For 2024, Kimco revised its FFO per share projection to the $1.60-$1.62 range from the $1.56-$1.60 range projected earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.60.
Kimco expects 2024 same property NOI growth of 2.75-3.25% compared with 2.25-3% (including RPT) guided earlier, and total acquisitions and structured investments are expected between $300 million and $350 million.
Kimco currently carries a Zacks Rank #3 (Hold).
Kimco Realty Corporation Price, Consensus and EPS Surprise
We now look forward to the earnings releases of other retail REITs like Simon Property Group, Inc. (SPG - Free Report) and Realty Income (O - Free Report) , both of which are slated to report on Aug 5.
The Zacks Consensus Estimate for Simon Property Group’s second-quarter 2024 FFO per share is pegged at $2.92, which suggests a year-over-year increase of 1.4%. SPG currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Realty Income’s second-quarter 2024 FFO per share is pegged at $1.05, which implies a year-over-year increase of 5%. O currently carries a Zacks Rank #2 (Buy).
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Kimco (KIM) Q2 FFO & Revenues Beat Estimates, Outlook Revised
Kimco Realty Corp. (KIM - Free Report) reported second-quarter 2024 funds from operations (FFO) per share of 41 cents, which beat the Zacks Consensus Estimate of 40 cents. The reported figure grew 5.1% from the year-ago quarter’s tally.
Though Kimco reported growth in revenues, a rise in interest expenses acted as a dampener.
This retail REIT clocked in revenues of $500.2 million, which topped the consensus mark of $496.9 million. Moreover, the figure improved 13% year over year.
According to Conor Flynn, CEO of Kimco, "Our ability to report strong growth reflects the quality of our open-air, grocery-anchored portfolio and further validates our investment thesis for the RPT acquisition. We see these positive trends continuing, and with $63 million of future cash flow from signed leases that have yet to commence paying rent, we are comfortable raising our full-year outlook.”
Quarter in Detail
Pro-rata portfolio occupancy at the end of the second quarter was 96.2%, reflecting an expansion of 40 basis points (bps) year over year and 20 bps sequentially.
Pro-rata anchor occupancy ended the quarter at 98.1%, reflecting an expansion of 40 bps year over year and 30 bps from the previous quarter. Pro-rata small shop occupancy ended the quarter at 91.7%, representing an uptick of 40 bps year over year and 20 bps sequentially.
Kimco executed 482 leases, aggregating 2.3 million square feet in the quarter. Blended pro-rata cash rent spreads on comparable spaces generated was 11.7%, with pro-rata cash rent spreads for new leases climbing 26.3%, and renewals and options rising 9%.
Same-property net operating income (NOI) grew 3% year over year to $377.7 million, backed by a rise in the minimum rent of 3.4%.
Interest expenses were up 20.9% year over year to $73.3 million in the reported quarter.
Portfolio Activity
During the quarter, Kimco invested $168 million under Kimco’s Structured Investment Program, including an additional $146.2 million investment in The Rim, a mixed-use lifestyle center located in San Antonio.
In the reported quarter, Kimco sold two properties and one land parcel for $49.2 million. The company’s pro-rata share of the sales was $7.9 million.
Balance Sheet Position
This retail REIT exited the second quarter of 2024 with $1.9 billion of immediate liquidity. This included $1.78 billion available on its $2.0 billion revolving credit facility and $127.6 million of cash and cash equivalents.
Its net-debt-to-EBITDA was 5.8X on a look-through basis as of Jun 30, 2024, down from 5.9X witnessed in the prior-year quarter.
Dividend Update
Concurrent with the second-quarter earnings release, Kimco’s board of directors declared a quarterly cash dividend of 24 cents per share. This dividend will be paid out on Sep 19 to its shareholders of record as of Sep 5, 2024.
2024 Guidance
For 2024, Kimco revised its FFO per share projection to the $1.60-$1.62 range from the $1.56-$1.60 range projected earlier. The Zacks Consensus Estimate for the same is currently pegged at $1.60.
Kimco expects 2024 same property NOI growth of 2.75-3.25% compared with 2.25-3% (including RPT) guided earlier, and total acquisitions and structured investments are expected between $300 million and $350 million.
Kimco currently carries a Zacks Rank #3 (Hold).
Kimco Realty Corporation Price, Consensus and EPS Surprise
Kimco Realty Corporation price-consensus-eps-surprise-chart | Kimco Realty Corporation Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other retail REITs like Simon Property Group, Inc. (SPG - Free Report) and Realty Income (O - Free Report) , both of which are slated to report on Aug 5.
The Zacks Consensus Estimate for Simon Property Group’s second-quarter 2024 FFO per share is pegged at $2.92, which suggests a year-over-year increase of 1.4%. SPG currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Realty Income’s second-quarter 2024 FFO per share is pegged at $1.05, which implies a year-over-year increase of 5%. O currently carries a Zacks Rank #2 (Buy).