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Vornado's (VNO) Q4 FFO Beats Estimates, Revenues Down Y/Y

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Vornado Realty Trust (VNO - Free Report) reported fourth-quarter 2019 funds from operations (FFO) plus assumed conversions, as adjusted of 89 cents per share, surpassing the Zacks Consensus Estimate of 83 cents. The reported figure remains flat, year over year.

Total same-store net operating income (NOI) in the New York portfolio as well as at theMART and 555 California buoyed the company’s performance in the fourth quarter.

However, total revenues came in at around $461 million in the reported quarter, missing the Zacks Consensus Estimate of $463 million. Moreover, the revenue figure compares unfavorably with the year-ago tally of $543.4 million.

For full-year 2019, the company reported FFO plus assumed conversions, as adjusted of $3.49 per share, down from $3.73 per share reported in 2018. Revenues for the full year also declined 11% year on year to $1.9 billion.

Behind the Headline Numbers

In the New York portfolio, 173,000 square feet of office space (117,000 square feet of space at share) and 94,000 square feet of retail space (73,000 square feet of space at share) were leased during the December-end quarter. Also, 52,000 square feet of area was leased at theMart and 30,000 square feet was leased at 555 California Street (21,000 square feet at share).

At the end of the fourth quarter, occupancy in the New York portfolio came in at 96.7%, shrinking 10 basis points (bps) sequentially, and 30 bps year over year. Occupancy in theMART was 94.6%, down 40 bps sequentially and 10 bps year over year. Furthermore, occupancy in 555 California Street was 99.8%, down 20 bps sequentially but up 40 bps year over year.

During the reported period, total same-store NOI increased 7.1% year over year. In fact, same-store NOI in the company’s New York portfolio grew 2.6%. The same at theMART and 555 California surged 114.3% and 3.3%, respectively.

During the October-December period, Vornado closed the sale of 17 condominium units at 220 CPS for net proceeds amounting to $565.9 million. This resulted in a financial statement net gain of $203.9 million.

As of Dec 31, 2019, Vornado had $1.5 billion of cash and cash equivalents, up from the $570.9 million reported as of the prior-year end.

Vornado Realty Trust Price, Consensus and EPS Surprise
 

Vornado Realty Trust Price, Consensus and EPS Surprise

Vornado Realty Trust price-consensus-eps-surprise-chart | Vornado Realty Trust Quote

Vornado currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We, now, look forward to the earnings releases of other REITs like Public Storage (PSA - Free Report) , American Tower Corporation (AMT - Free Report) and Mack-Cali Realty Corporation , all of which are slated to report their quarterly numbers next week.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.


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