Medical Properties (MPW) Beats on Q2 FFO, Narrows '23 View
Medical Properties Trust, Inc. MPW reported second-quarter 2023 normalized funds from operations (FFO) per share of 48 cents, beating the Zacks Consensus Estimate of 38 cents. This includes around $68 million from the receipt of equity in PHP in lieu of cash for 2023, previously unrecorded but contractually owed rent and interest revenues from Prospect Medical Holdings.
However, quarterly total revenues of $337.4 million missed the consensus estimate of $352.8 million.
On a year-over-year basis, while normalized FFO per share improved 4.3%, total revenues declined 15.7%.
A rise in interest expense during the quarter acted as a dampener. This healthcare real estate investment trust (REIT) also narrowed its outlook for 2023. While the company’s shares lost 14.06% on Aug 8 during regular trading hours on the NYSE, it reflects a gain of 2.36% so far in today's trading session.
In July 2023, MPW disposed of three general acute hospitals to Prime Healthcare for around $100 million. The hospitals were located in Kansas and Texas.
Behind the Headlines
During the reported quarter, revenues from rent billed came in at $247.5 million, rising 2.6% from the prior-year quarter’s $241.2 million. Also, income from financing leases increased almost 32% year over year.
However, interest expenses flared up 19.1% year over year during the quarter.
The company noted that rent collections commenced in May 2023 at a newly developed post-acute facility in California, which is leased to Ernest Health at a total cost of nearly $50 million.
Balance Sheet Position
MPW exited the second quarter of 2023 with cash and cash equivalents of $324.1 million, up from $302.3 million as of Mar 31, 2023.
As of Jun 30, 2023, the adjusted net debt to adjusted annualized EBITDAre ratio was 6.8.
2023 Guidance
For the current year, MPW narrowed its expectation for normalized FFO per share to $1.53-$1.57 from $1.50-$1.61, guided earlier.
Also, net income per share is now estimated to be between 33 cents and 37 cents from the prior guided range of 6-17 cents.
MPW currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Medical Properties Trust, Inc. Price, Consensus and EPS Surprise
Medical Properties Trust, Inc. price-consensus-eps-surprise-chart | Medical Properties Trust, Inc. Quote
Performance of Other REITs
Healthpeak Properties, Inc. PEAK reported second-quarter 2023 FFO as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a whisker. The reported figure improved 2.3% from the year-ago quarter.
Results reflected better-than-anticipated revenues. Moreover, a year-over-year improvement in same-store portfolio cash (adjusted) net operating income (NOI) was witnessed across the portfolio. PEAK revised its 2023 outlook.
Welltower Inc.’s WELL second-quarter 2023 normalized FFO per share of 90 cents surpassed the Zacks Consensus Estimate of 86 cents. The reported figure improved 4.7% from the prior-year quarter’s actual.
Results reflected better-than-anticipated revenues. The total same-store NOI (SSNOI) increased year over year, driven by SSNOI growth in the seniors housing operating portfolio. Welltower also raised its guidance for 2023 normalized FFO per share.
Ventas, Inc. VTR reported second-quarter 2023 normalized FFO per share of 75 cents, outpacing the Zacks Consensus Estimate by a whisker. The reported figure increased 4.2% from the prior-year quarter’s tally.
Results reflected better-than-anticipated revenues. Also, Ventas’ same-store cash NOI increased year over year on strong performance across the portfolio. The company revised its outlook 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.
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