Cousins Properties (CUZ) Q3 FFO Meets Mark, '23 View Revised
Cousins Properties’ CUZ third-quarter 2023 funds from operations (FFO) per share of 65 cents was in line with the Zacks Consensus Estimate.
Results reflect lower-than-anticipated revenues. Although the company witnessed decent leasing activity during the quarter, a substantial jump in interest expenses acted as a dampener. CUZ also revised its 2023 outlook for FFO per share.
Quarterly rental property revenues came in at $198.4 million, lagging the Zacks Consensus Estimate of $202.9 million.
On a year-over-year basis, while FFO per share declined 5.8%, rental property revenues increased 2.6%.
Quarter in Detail
Cousins Properties executed leases for 547,899 square feet of office space in the third quarter, including 189,426 square feet of new and expansion leases.
The same-property rental property revenues, on a cash basis, rose marginally year over year to $176.1 million. The same-property rental property operating expenses on a cash basis fell 6% to $61.5 million in the third quarter of 2023. As a result, the same-property net operating income, on a cash basis, climbed 4.6% to $114.7 million from the prior-year period.
The weighted average occupancy of the same-property portfolio was 87.3%, up 20 basis points from a year ago. Our estimate was pegged at 87.7%.
CUZ ended the quarter with the same-property portfolio being leased 90.8%, up from 89.8% at the end of the year-ago period.
The second-generation net rent per square foot (cash basis) climbed 9.8%.
However, interest expenses jumped 46.9% year over year to $27 million during the quarter.
Balance Sheet
CUZ exited the third quarter with cash and cash equivalents of $6.9 million, down from $8.0 million as of Jun 30, 2023.
The company’s net debt-to-annualized EBITDAre ratio in the quarter was 5.02 compared with 4.75 in the year-ago quarter.
2023 Outlook Revised
Cousins Properties revised its guidance for 2023 FFO per share to the range of $2.60-$2.64 from $2.57-$2.65 estimated earlier. The Zacks Consensus Estimate is currently pegged at $2.62, which lies within expectations.
The increase in FFO is mainly due to a reduction in real estate taxes and a gain from land sale.
CUZ currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cousins Properties Incorporated Price, Consensus and EPS Surprise
Cousins Properties Incorporated price-consensus-eps-surprise-chart | Cousins Properties Incorporated Quote
Performance of Other REITs
Crown Castle Inc. CCI reported adjusted FFO (AFFO) per share of $1.77, lagging the Zacks Consensus Estimate by a whisker. The reported figure declined 4.3% from the year-ago quarter.
Results reflected lower-than-anticipated revenues. Higher interest expense and lower contribution from adjusted EBITDA were undermining factors. While CCI maintained its outlook for 2023, it issued 2024 AFFO per share guidance below the consensus mark.
Alexandria Real Estate Equities, Inc. ARE reported third-quarter 2023 AFFO per share of $2.26, surpassing the Zacks Consensus Estimate of $2.24. The reported figure climbed 6.1% from the year-ago quarter.
Results reflected year-over-year revenue growth, aided by decent leasing activity and solid rental rate growth. ARE also increased the midpoint of its 2023 AFFO per share outlook by 2 cents.
Equinix Inc.’s EQIX third-quarter 2023 AFFO per share of $8.19 surpassed the Zacks Consensus Estimate of $7.79. The figure improved nearly 6% from the prior-year quarter.
EQIX’s results reflected steady growth in colocation and inter-connection revenues as enterprises and service providers look to integrate artificial intelligence into their strategies and offerings. During the quarter, Equinix’s total interconnections reached 460,500, rising 1% sequentially and 4% year over year. The company also raised its AFFO per share guidance for 2023.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Equinix, Inc. (EQIX) : Free Stock Analysis Report
Crown Castle Inc. (CCI) : Free Stock Analysis Report
Cousins Properties Incorporated (CUZ) : Free Stock Analysis Report
Alexandria Real Estate Equities, Inc. (ARE) : Free Stock Analysis Report
