Federal Realty Investment Trust (FRT) Reports Q3 2023 Earnings: Net Income Drops, FFO Increases
Net income available for common shareholders was $0.67 per diluted share in Q3 2023, down from $1.89 per diluted share in Q3 2022.
Funds from operations (FFO) per diluted share increased to $1.65 in Q3 2023, up from $1.59 in Q3 2022.
Portfolio occupancy stands at 92.3%, reflecting a negative impact of approximately 100 basis points due to the vacating of the final Bed Bath & Beyond leases.
2023 earnings per diluted share guidance tightened and raised to $2.65 - $2.73, and 2023 FFO per diluted share guidance to $6.50 - $6.58.
On November 2, 2023, Federal Realty Investment Trust (NYSE:FRT) released its earnings report for the third quarter ended September 30, 2023. The report shows a decrease in net income available for common shareholders, from $1.89 per diluted share in Q3 2022 to $0.67 per diluted share in Q3 2023. However, the company's funds from operations (FFO) per diluted share increased to $1.65 in Q3 2023, up from $1.59 in Q3 2022.
Financial Performance
Operating income for the third quarter of 2023 was $100.1 million, a significant decrease from $191.7 million in the same period in 2022. The net income available for common shareholders was $55.0 million, compared to $154.1 million in Q3 2022. Despite the decrease in net income, FRT's FFO for Q3 2023 was $135.3 million, or $1.65 per diluted share, compared to $129.3 million, or $1.59 per diluted share for the third quarter 2022.
Portfolio and Leasing Activity
Federal Realty's portfolio was 92.3% occupied as of September 30, 2023, an increase of 20 basis points year-over-year. The portfolio was 94.0% leased as of the same date. Both the occupied and leased metrics reflect a negative impact of approximately 100 basis points resulting from the vacating of the final Bed Bath & Beyond leases. The small shop leased rate was 90.7% as of September 30, 2023, an increase of 50 basis points quarter-over-quarter and 80 basis points year-over-year.
Dividends and Guidance
Federal Realty's Board of Trustees declared a regular quarterly cash dividend of $1.09 per common share, resulting in an indicated annual rate of $4.36 per common share. The company has tightened and raised its 2023 earnings per diluted share guidance to $2.65 - $2.73 and 2023 FFO per diluted share guidance to $6.50 - $6.58.
Looking Ahead
Despite the challenges, Federal Realty remains focused on growing occupancy over the coming quarters. The company's CEO, Donald C. Wood, stated, "In the first nine months of 2023, we achieved a Federal Realty record by leasing over 1.6 million square feet of comparable space. Our business's strength lies in superior demographics, fueling active leasing at our premium retail destinations."
Explore the complete 8-K earnings release (here) from Federal Realty Investment Trust for further details.
This article first appeared on GuruFocus.
