Key Takeaways from Simon Property Group’s 4Q15 Earnings Call
Simon Property Group Reported Lackluster 4Q15 Earnings
Simon’s conference call
Simon Property Group’s (SPG) management conducted a conference call to discuss its 4Q15 earnings as well as to provide an outlook for the future. The company’s FFO per share and revenue beat analyst estimates.
Higher dividends
Along with its earnings, Simon Property Group (SPG) also declared a quarterly common stock dividend of $1.60 per share, a 14.3% increase year-over-year. The dividend is to be payable on February 29, 2016, to stockholders of record as of February 12, 2016.
Management’s comments
The company’s management was quite upbeat on its 4Q15 performance. David Simon, chairman and chief executive officer, noted, ‘‘I am very pleased to report another year of industry-leading growth with record earnings and dividends for our company.”
Simon added, “We had strong results to wrap up a great year. We opened, started, and completed several new development and redevelopment projects. We successfully executed several capital market transactions, extending our average term and reducing our weighted interest cost.”
Strategic projects
In view of the buoyancy in the retail sector, Simon Property Group (SPG) has initiated a number of new projects. During the conference call, Simon noted, “During the quarter, we opened two significant expansions and completed a number of other strategic redevelopments, including the new Fashion Wing at Del Amo, which includes a new Nordstrom and more than 100 exceptional brands; the expansion in The Colonnade at Sawgrass, where we added 20 small shops, very high-end small shops and two restaurants; and the redevelopment at Phipps, Woodfield Mall, and Menlo Park. We also started construction on several new projects during the quarter including The Shops at Riverside and Copley Place.”
Guidance for fiscal 2016
Simon Property Group (SPG) is positive on the future of the country’s retail sector, as well as higher demand for its properties. Its FFO is estimated to range from $10.70–$10.80 per diluted share for fiscal 2016. The net income is projected to be within the range of $5.95–$6.05 per diluted share.
Simon Property Group constitutes 7.7% of the iShares Cohen & Steers REIT ETF (ICF). Peers Macerich (MAC), General Growth Properties (GGP), and Taubman Centers (TCO) have weights of 2.5%, 3.9%, and 1.1%, respectively, in the same portfolio.
In the final part of this series, we’ll discuss Simon Property Group’s valuation.
Browse this series on Market Realist:
