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Federal Realty (FRT) Q1 FFO and Revenues Miss Estimates

Zacks Equity Research

Federal Realty Investment Trust’s FRT first-quarter 2020 funds from operations (FFO) per share of $1.50 missed the Zacks Consensus Estimate of $1.53. Moreover, the reported figure declined 3.9% from the prior-year tally of $1.56.

Total revenues fell marginally year over year to $231.6 million in the reported quarter. The top-line figure also missed the Zacks Consensus Estimate of $232.8 million.

Results reflect fall in property operating income and cash-basis rollover growth on comparable spaces.

The company informed that it has collected about 53% of total April 2020 billed recurring rents.

Quarter in Details

During the reported quarter, Federal Realty signed 82 leases for 491,003 square feet of retail space. On a comparable space basis, the company leased 466,453 square feet at an average rent of $26.78 per square foot. This denotes cash-basis rollover growth of 5%.

As of Mar 31, 2020, the company’s overall portfolio was 93.6% leased. As of that date, the comparable property portfolio was 94.2% leased. Property operating income (POI) for comparable properties fell 2.5% during the quarter.

During the March-end quarter, Federal Realty sold the Pottery Barn building in Old Pasadena, CA for $16.1 million.

Balance Sheet

Federal Realty exited first-quarter 2020 with cash and cash equivalents of $994.7 million, up from the $127.4 million posted at the end of 2019.
The company made use of its $1-billion revolving credit facility by drawing down $990 million.

Also, the company concluded a $400-million unsecured term loan to repay outstanding balances under its $1-billion unsecured credit facility. This term loan carries an interest of LIBOR plus 135 basis points (bps). This will mature in May 2021 with the company having an option to extend it till May 2022.

Dividend Update

The company announced a regular quarterly cash dividend of $1.05 per share. This hinted at an annual rate of $4.20 per share. This dividend will be paid on Jul 15, to shareholders of record as of Jun 22, 2020.

Outlook

The company had earlier withdrawn the 2020 guidance in light of the coronavirus pandemic. It had earlier projected FFO per share of $6.40-$6.58 for 2020.

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

Federal Realty Investment Trust Price, Consensus and EPS Surprise

Federal Realty Investment Trust Price, Consensus and EPS Surprise

Federal Realty Investment Trust price-consensus-eps-surprise-chart | Federal Realty Investment Trust Quote

We, now, look forward to the earnings releases of other REITs like Outfront Media Inc. OUT, Kimco Realty Corp. KIM and Ventas, Inc. VTR, which are slated to report quarterly numbers on May 8.

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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