Earnings Review and Free Research Report: QTS’ Revenue Jumped 10%; Operating FFO Grew 6.4%
Research Desk Line-up: Extra Space Storage Post Earnings Coverage
LONDON, UK / ACCESSWIRE / November 9, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on QTS Realty Trust, Inc. (NYSE: QTS), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=QTS, following the Company's posting of its third quarter fiscal 2017 operating results on October 24, 2017. The real estate investment trust based in Overland Park, Kansas, outperformed top- and bottom-line expectations and also raised its operating funds from operations (FFO) guidance. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the REIT - Industrial industry. Pro-TD has currently selected Extra Space Storage Inc. (NYSE: EXR) for due-diligence and potential coverage as the Company announced on November 01, 2017, its financial results for Q3 2017 which ended on September 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on Extra Space Storage when we publish it.
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Earnings Reviewed
QTS generated total revenues of $113.77 million in Q3 2017, reflecting an increase of 10.0% compared to revenues of $103.46 million in Q3 2016. The Company's Monthly Recurring Revenue (MRR) as of September 30, 2017, was $31.6 million, representing an increase of 6.2% compared to MRR as of September 30, 2016, of $29.8 million. QTS' revenue numbers topped analysts' estimates of $113.64 million.
QTS generated $52.9 million of adjusted EBITDA in Q3 2017, an increase of 11.9% compared to $47.3 million for Q3 2016.
QTS' net income in Q3 2017 was $7.4 million, or $0.13 per diluted share, which included approximately $1.1 million of transaction, integration, and other costs and $2.5 million of income tax benefit compared to net income of $6.5 million, or $0.12 per diluted share, in Q3 2016, which included approximately $3.5 million of transaction and integration costs and $4.2 million of income tax benefit.
QTS generated operating FFO of $39.7 million, or $0.70 per diluted share, in Q3 2017, including a non-cash tax benefit of approximately $2.5 million, up 6.4% compared to operating FFO of $37.4 million, or $0.67 per diluted share, for Q3 2016, which included a non-cash tax benefit of approximately $3.1 million. Excluding the effects of the Company's non-cash deferred tax benefit; QTS' operating FFO in the reported quarter was $37.3 million, or $0.66 per diluted share, compared to operating FFO of $34.3 million, or $0.62 per diluted share, in the prior year's same quarter. The Company's FFO numbers beat Wall Street's estimates of $0.68 per share.
Leasing Activity
During Q3 2017, QTS entered into new and modified customer leases representing approximately $15.3 million of incremental annualized rent, net of downgrades, which was 40.1% higher than the prior four quarter average.
During Q3 2017, QTS renewed leases with a total annualized rent of $11.4 million at an average rent per square foot of $660, which was 2.1% higher than the annualized rent prior to their respective renewals. The Company's rental churn (MRR lost in the period to a customer intending to fully exit the QTS platform in the near-term compared to total MRR at the beginning of the period) was 1.3% for Q3 2017.
During Q3 2017, QTS commenced customer leases representing approximately $32.6 million of annualized rent at $617 per square foot. As of September 30, 2017, the Company's booked-not-billed MRR balance was approximately $4.7 million, or $56.6 million of annualized rent, compared to $39.7 million of annualized rent at June 30, 2017. QTS is expecting the booked-not-billed balance to contribute an incremental $2.7 million to revenue in 2017, representing $15.5 million in annualized revenues, an incremental $13.1 million in 2018, representing $19.9 million in annualized revenues and an incremental $21.1 million in annualized revenues thereafter.
Development, Redevelopment, and Acquisitions
During Q3 2017, QTS brought online approximately two megawatts of gross power and approximately 9,000 net rentable square feet ("NRSF") of raised floor and various portions of customer-specific capital at an aggregate cost of approximately $19 million. The Company expects to bring an additional 44,000 raised floor NRSF into service in Q4 2017 at an aggregate cost of approximately $69 million.
During Q3 2017, QTS completed the acquisition of approximately 84 acres of land in Phoenix, Arizona for $25 million to be used for future development.
Balance Sheet and Liquidity
As of September 30, 2017, QTS' total debt balance net of cash and cash equivalents was $1,100.5 million, resulting in a net debt to last quarter annualized adjusted EBITDA of 5.2x. This ratio compared to the 5.3x net debt to annualized adjusted EBITDA reported in Q2 2017 and remains in-line with the Company's expectations.
During Q3 2017, pursuant to its At-the-market (ATM) program, the Company issued 1,015,332 shares of QTS' Class A common stock at a weighted average price of $53.65 per share which generated net proceeds of approximately $53.7 million. During the nine months ended September 30, 2017, the Company issued 1,761,681 shares of QTS' Class A common stock through the ATM Program at a weighted average price of $53.63 per share which generated net proceeds of approximately $93.1 million.
As of September 30, 2017, QTS had total available liquidity of approximately $430 million, comprising of $421 million of available capacity under the Company's unsecured revolving credit facility and approximately $9 million of cash and cash equivalents.
Outlook
QTS reiterated its guidance for revenue growth, adjusted EBITDA and operating FFO for 2017. The Company is expecting y-o-y revenue growth to be at the lower end of its previously provided range of 11% to 13%. In addition, the Company reaffirmed its 2017 adjusted EBITDA guidance of $203.0 million to $211.0 million.
QTS raised its guidance for operating FFO per share to a range of $2.68 to $2.80. The Company continues to expect 2017 capital expenditures, excluding acquisitions, to be in the range of approximately $325.0 million to $375.0 million.
Stock Performance
On Wednesday, November 08, 2017, the stock closed the trading session at $60.09, climbing 1.18% from its previous closing price of $59.39. A total volume of 372.22 thousand shares have exchanged hands. QTS Realty Trust's stock price soared 12.70% in the last three months, 21.47% in the past six months, and 30.21% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have surged 21.03%. The stock is trading at a PE ratio of 159.39 and has a dividend yield of 2.60%. At Wednesday's closing price, the stock's net capitalization stands at $2.93 billion.
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