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Simon Property (SPG) Q2 FFO Lags, Dividend & '24 Outlook Raised
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Simon Property Group, Inc. (SPG - Free Report) reported second-quarter funds from operations (FFO) per share of $2.90, missing the Zacks Consensus Estimate of $2.93. However, the figure increased from $2.88 reported in the year-ago period.
Results reflect higher interest expenses on a year-over-year basis. However, an increase in revenues, backed by a rise in the base rent per square foot and occupancy levels supported the results to some extent. SPG also increased its 2024 FFO per share outlook and raised its dividend.
Simon Property generated revenues of $1.46 billion in the quarter, which surpassed the Zacks Consensus Estimate of $1.43 billion. The reported figure increased 6.5% year over year.
According to David Simon, the chairman, chief executive officer and president of Simon Property Group, "We continue to invest in our retail real estate platforms with transformative redevelopments, including the addition of mixed-use components, and selective new developments including the grand opening of Tulsa Premium Outlets on Aug 15, 2024, at 100% leased.”
Behind the Headlines
SPG reported revenues from lease income of nearly $1.32 billion, 4.8% higher than the prior-year period’s figure. Our estimate was pegged at $1.30 billion.
As of Jun 30, 2024, the occupancy for the U.S. Malls and Premium Outlets portfolio came in at 95.6%, up 90 basis points from 94.7% as of Jun 30, 2023. We projected the metric to be 95.5%.
The base minimum rent per square foot for the U.S. Malls and Premium Outlets portfolio was $57.94 as of Jun 30, 2024, rising from $56.27 as of Jun 30, 2023, reflecting an increase of 3%. Our estimate was pegged at $56.63.
The domestic property net operating income (NOI) increased 4.5% year over year, and the portfolio NOI ascended 4.4%.
However, quarterly interest expenses of $221.3 million marked an increase of 1.5% year over year. Our estimate was pegged at $222 million.
Balance Sheet Position
Simon Property exited the second quarter of 2024 with $11.2 billion of liquidity. This comprised $3.1 billion of cash in hand, including its share of joint-venture cash and $8.1 billion of available capacity under the company’s revolving credit facilities.
Outlook
For 2024, Simon Property now projects FFO per share in the range of $12.80- $12.90, up from the $12.75-$12.90 range guided earlier. The Zacks Consensus Estimate of $12.84, lies within the guided range.
Dividend Update
Concurrent with its second-quarter earnings release, Simon Property announced a quarterly common stock dividend of $2.05 for the third quarter of 2024, marking a 2.5% hike from the prior quarter and 7.9% year over year. The dividend will be paid out on Sep 30 to shareholders of record as of Sep 16.
SITE Centers Corp. (SITC - Free Report) reported second-quarter 2024 operating funds from operations per share of 27 cents, which beat the Zacks Consensus Estimate of 24 cents. The figure fell 6.9% year over year.
Results reflected a rise in base rent per square foot and same-store NOI.
Federal Realty Investment Trust’s (FRT - Free Report) second-quarter 2024 FFO per share of $1.69 surpassed the Zacks Consensus Estimate of $1.68. The figure marked a rise of 1.2% from the year-ago quarter’s tally of $1.67.
Results reflected a healthy leasing activity and better-than-expected growth in revenues. The retail REIT also tightened and raised its guidance for 2024 FFO per share and announced a hike in dividends.
Kimco Realty Corp. (KIM - Free Report) reported a second-quarter 2024 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.
Results reflected growth in revenues on a year-over-year basis. However, a rise in interest expenses acted as a dampener.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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Simon Property (SPG) Q2 FFO Lags, Dividend & '24 Outlook Raised
Simon Property Group, Inc. (SPG - Free Report) reported second-quarter funds from operations (FFO) per share of $2.90, missing the Zacks Consensus Estimate of $2.93. However, the figure increased from $2.88 reported in the year-ago period.
Results reflect higher interest expenses on a year-over-year basis. However, an increase in revenues, backed by a rise in the base rent per square foot and occupancy levels supported the results to some extent. SPG also increased its 2024 FFO per share outlook and raised its dividend.
Simon Property generated revenues of $1.46 billion in the quarter, which surpassed the Zacks Consensus Estimate of $1.43 billion. The reported figure increased 6.5% year over year.
According to David Simon, the chairman, chief executive officer and president of Simon Property Group, "We continue to invest in our retail real estate platforms with transformative redevelopments, including the addition of mixed-use components, and selective new developments including the grand opening of Tulsa Premium Outlets on Aug 15, 2024, at 100% leased.”
Behind the Headlines
SPG reported revenues from lease income of nearly $1.32 billion, 4.8% higher than the prior-year period’s figure. Our estimate was pegged at $1.30 billion.
As of Jun 30, 2024, the occupancy for the U.S. Malls and Premium Outlets portfolio came in at 95.6%, up 90 basis points from 94.7% as of Jun 30, 2023. We projected the metric to be 95.5%.
The base minimum rent per square foot for the U.S. Malls and Premium Outlets portfolio was $57.94 as of Jun 30, 2024, rising from $56.27 as of Jun 30, 2023, reflecting an increase of 3%. Our estimate was pegged at $56.63.
The domestic property net operating income (NOI) increased 4.5% year over year, and the portfolio NOI ascended 4.4%.
However, quarterly interest expenses of $221.3 million marked an increase of 1.5% year over year. Our estimate was pegged at $222 million.
Balance Sheet Position
Simon Property exited the second quarter of 2024 with $11.2 billion of liquidity. This comprised $3.1 billion of cash in hand, including its share of joint-venture cash and $8.1 billion of available capacity under the company’s revolving credit facilities.
Outlook
For 2024, Simon Property now projects FFO per share in the range of $12.80- $12.90, up from the $12.75-$12.90 range guided earlier. The Zacks Consensus Estimate of $12.84, lies within the guided range.
Dividend Update
Concurrent with its second-quarter earnings release, Simon Property announced a quarterly common stock dividend of $2.05 for the third quarter of 2024, marking a 2.5% hike from the prior quarter and 7.9% year over year. The dividend will be paid out on Sep 30 to shareholders of record as of Sep 16.
Currently, SPG carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Simon Property Group, Inc. Price, Consensus and EPS Surprise
Simon Property Group, Inc. price-consensus-eps-surprise-chart | Simon Property Group, Inc. Quote
Performance of Other Retail REITs
SITE Centers Corp. (SITC - Free Report) reported second-quarter 2024 operating funds from operations per share of 27 cents, which beat the Zacks Consensus Estimate of 24 cents. The figure fell 6.9% year over year.
Results reflected a rise in base rent per square foot and same-store NOI.
Federal Realty Investment Trust’s (FRT - Free Report) second-quarter 2024 FFO per share of $1.69 surpassed the Zacks Consensus Estimate of $1.68. The figure marked a rise of 1.2% from the year-ago quarter’s tally of $1.67.
Results reflected a healthy leasing activity and better-than-expected growth in revenues. The retail REIT also tightened and raised its guidance for 2024 FFO per share and announced a hike in dividends.
Kimco Realty Corp. (KIM - Free Report) reported a second-quarter 2024 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.
Results reflected growth in revenues on a year-over-year basis. However, a rise in interest expenses acted as a dampener.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO), a widely used metric to gauge the performance of REITs.