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Boston Properties (BXP) Beats Q2 FFO Estimates, Raises View

Zacks Equity Research

Boston Properties Inc.’s BXP second-quarter 2019 funds from operations (FFO) per share of $1.78 surpassed the Zacks Consensus Estimate of $1.74. The bottom line also came in 12.7% higher than the year-ago figure.

Results were supported by higher occupancy and strong leasing activity. Further, higher lease revenues from development project completions and improvements in the company’s in-service portfolio drove bottom-line growth.

Revenues from lease came in at $680.2 million, lagging the Zacks Consensus Estimate of $680.3 million.

Property Update

As of Jun 30, 2019, Boston Properties’ portfolio comprised 193 properties, covering a total of around 50.9 million square feet of space. This included 12 under construction properties.

Total portfolio occupancy for the company’s in-service office properties was 93.4% as of Jun 30, 2019, indicating a sequential expansion of 50 basis points.

During the June-ended quarter, Boston Properties accomplished the sale of three properties, raising nearly $150 million in net cash proceeds.

In addition, Boston Properties signed a lease renewal with U.S. government at New Dominion Technology Park in Herndon, VA for 492,000 square feet for a term of 15 years.

Liquidity

Boston Properties exited the second quarter with cash and cash equivalents of $1.09 billion, up from $543.3 million as of Dec 31, 2018.

Outlook

The company provided third-quarter 2019 FFO per share guidance of $1.75-$1.77. The Zacks Consensus Estimate is pegged at $1.75.

For full-year 2019, Boston Properties revised its FFO per share guidance to $7.02-$7.08, up from the previous guidance of $6.95-$7.02. The Zacks Consensus Estimate for 2019 FFO is $6.99.

Our Viewpoint

A portfolio of high-quality properties in select high-rent, high barrier-to-entry geographic markets has enabled the company to enjoy high leasing volumes amid recovery in the job market.

Furthermore, the company is focusing on development projects that are expected to contribute to its earnings when completed. This too, will drive its bottom-line growth in the upcoming quarters.

Boston Properties, Inc. Price, Consensus and EPS Surprise

Boston Properties, Inc. Price, Consensus and EPS Surprise

Boston Properties, Inc. price-consensus-eps-surprise-chart | Boston Properties, Inc. Quote

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

Performance of Other REITs

Cousins Properties Incorporated CUZ reported second-quarter FFO per share (before TIER transaction costs) of 71 cents, missing the Zacks Consensus Estimate by a whisker. Nonetheless, the figure came in higher than the prior-year quarter’s reported tally of 60 cents.

SL Green Realty Corp. SLG reported second-quarter 2019 FFO of $1.82 per share, surpassing the Zacks Consensus Estimate of $1.73. The bottom line includes promote income from the sale of 521 Fifth Avenue of $3.4 million or 4 cents per share. Results also compared favorably with the year-ago quarter figure of $1.69.

Crown Castle International Corp. CCI posted second-quarter adjusted AFFO per share of $1.48, up from the prior-year figure of $1.31. Further, the bottom line outpaced the Zacks Consensus Estimate of $1.43.

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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