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Realty Income (O) Q1 FFO and Revenues Surpass Estimates
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Realty Income Corporation’s (O - Free Report) first-quarter 2020 adjusted funds from operations (AFFO) per share of 88 cents surpassed the Zacks Consensus Estimate of 85 cents. The reported figure is also up 7.3% from the prior-year quarter’s 82 cents.
Results were driven by improvement in same-store rent and healthy occupancy level, which aided top-line expansion.
Total revenues for the reported quarter came in at $414.3 million, up 16.9% year over year. The revenue figure also exceeded the Zacks Consensus Estimate of $412.1 million.
The company also apprised of its rental receipts for April, with 82.9% of the contractual rent collected for the month across its total portfolio. It has collected 82.9% of contractual rent due for April from the top 20 tenants and 99.9% of contractual rent for the month from its investment-grade tenants.
Quarter in Detail
During first-quarter 2020, same-store rents on 5,535 properties under lease inched up 0.2% to $321.5 million from the prior-year quarter. Portfolio occupancy of 98.5% as of Mar 31, 2020, expanded 20 basis points year over year. Further, the company generated a rent recapture rate of 99% on re-leasing activity.
During the reported quarter, Realty Income invested $486 million in 65 properties and properties under development or expansion. This also includes $165.6 million in four properties in the U.K.
Around 36% of the rental revenues from acquisitions reported during the quarter came in from investment grade-rated tenants, their subsidiaries or affiliated companies.
The company sold 17 properties, generating net proceeds of $126.2 million, with a gain on sales of $38.5 million, during the January-March period.
Balance Sheet
Realty Income exited first-quarter 2020 with cash and cash equivalents of $41.8 million, down from the $54 million witnessed at the end of 2019. Furthermore, the company raised $752.4 million from the sale of common stock, at a weighted average price of $77.37 per share, during the quarter.
The company also completed the early redemption of its $250 million 5.750% notes due on January 2021 in the first quarter. This resulted in a $9.8-million loss on extinguishment of debt.
Moreover, the company has a $3-billion unsecured revolving credit facility.The revolving credit facility also has a $1-billion expansion feature. As of Mar 31, 2020, the company had balance of borrowings outstanding under its revolving credit facility of $615.2 million.
However, as a precautionary measure against the uncertainties prevailing due to the coronavirus pandemic, on Apr 9, the company raised an additional $1.2 billion on its credit facility to increase its cash position to $1.25 billion.
Outlook
In light of the coronavirus pandemic, the company withdrew its 2020 guidance on Apr 9. The company had earlier projected 2020 adjusted FFO per share of $3.50-$3.56, indicating annual growth of 5.4-7.2%. It is now of the opinion to not provide a revised guidance for the year during these uncertain times.
We, now, look forward to the earnings releases of other REITs likeInnovative Industrial Properties, Inc. (IIPR - Free Report) , Welltower Inc. (WELL - Free Report) and Extra Space Storage Inc. (EXR - Free Report) , all of which are slated to report quarterly numbers on May 6
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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Realty Income (O) Q1 FFO and Revenues Surpass Estimates
Realty Income Corporation’s (O - Free Report) first-quarter 2020 adjusted funds from operations (AFFO) per share of 88 cents surpassed the Zacks Consensus Estimate of 85 cents. The reported figure is also up 7.3% from the prior-year quarter’s 82 cents.
Results were driven by improvement in same-store rent and healthy occupancy level, which aided top-line expansion.
Total revenues for the reported quarter came in at $414.3 million, up 16.9% year over year. The revenue figure also exceeded the Zacks Consensus Estimate of $412.1 million.
The company also apprised of its rental receipts for April, with 82.9% of the contractual rent collected for the month across its total portfolio. It has collected 82.9% of contractual rent due for April from the top 20 tenants and 99.9% of contractual rent for the month from its investment-grade tenants.
Quarter in Detail
During first-quarter 2020, same-store rents on 5,535 properties under lease inched up 0.2% to $321.5 million from the prior-year quarter. Portfolio occupancy of 98.5% as of Mar 31, 2020, expanded 20 basis points year over year. Further, the company generated a rent recapture rate of 99% on re-leasing activity.
During the reported quarter, Realty Income invested $486 million in 65 properties and properties under development or expansion. This also includes $165.6 million in four properties in the U.K.
Around 36% of the rental revenues from acquisitions reported during the quarter came in from investment grade-rated tenants, their subsidiaries or affiliated companies.
The company sold 17 properties, generating net proceeds of $126.2 million, with a gain on sales of $38.5 million, during the January-March period.
Balance Sheet
Realty Income exited first-quarter 2020 with cash and cash equivalents of $41.8 million, down from the $54 million witnessed at the end of 2019. Furthermore, the company raised $752.4 million from the sale of common stock, at a weighted average price of $77.37 per share, during the quarter.
The company also completed the early redemption of its $250 million 5.750% notes due on January 2021 in the first quarter. This resulted in a $9.8-million loss on extinguishment of debt.
Moreover, the company has a $3-billion unsecured revolving credit facility.The revolving credit facility also has a $1-billion expansion feature. As of Mar 31, 2020, the company had balance of borrowings outstanding under its revolving credit facility of $615.2 million.
However, as a precautionary measure against the uncertainties prevailing due to the coronavirus pandemic, on Apr 9, the company raised an additional $1.2 billion on its credit facility to increase its cash position to $1.25 billion.
Outlook
In light of the coronavirus pandemic, the company withdrew its 2020 guidance on Apr 9. The company had earlier projected 2020 adjusted FFO per share of $3.50-$3.56, indicating annual growth of 5.4-7.2%. It is now of the opinion to not provide a revised guidance for the year during these uncertain times.
Realty Income currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Realty Income Corporation Price, Consensus and EPS Surprise
Realty Income Corporation price-consensus-eps-surprise-chart | Realty Income Corporation Quote
We, now, look forward to the earnings releases of other REITs likeInnovative Industrial Properties, Inc. (IIPR - Free Report) , Welltower Inc. (WELL - Free Report) and Extra Space Storage Inc. (EXR - Free Report) , all of which are slated to report quarterly numbers on May 6
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.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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