Simon Property (SPG) Q3 FFO Beats, View Up, Dividend Hiked
Simon Property Group’s SPG third-quarter 2022 comparable funds from operations (FFO) per share of $2.97 exceeded the Zacks Consensus Estimate of $2.93. The figure compares favorably with the year-ago quarter’s $2.92.
Results reflect healthy operating performance and growth in occupancy levels. Based on the quarterly results, this retail REIT behemoth raised the 2022 FFO per share outlook and announced a hike in the quarterly dividend.
Simon Property generated revenues of $1.315 billion in the quarter. While the figure missed the Zacks Consensus Estimate by 0.2%, it increased 1.5% year over year.
Inside the Headlines
SPG reported revenues from lease income of $1.22 billion, increasing marginally from the prior-year period’s $1.21 billion. Our estimate for the same was pegged at $1.21 billion.
As of Sep 30, 2022, the occupancy for the U.S. Malls and Premium Outlets portfolio came in at 94.5%, up from 92.8% witnessed as of Sep 30, 2021. We had projected the same at 94% for the quarter.
The base minimum rent per square foot for the U.S. Malls and Premium Outlets portfolio was $54.80 as of Sep 30, 2022, rising from $53.91 as of Sep 30, 2021. The figure also surpassed our estimate of $54.00.
SPG’s total operating expenses in the third quarter were $663.6 million, declining 3% from the prior-year quarter’s $684.2 million.
The domestic property net operating income (NOI) increased 2.3% year over year while portfolio NOI climbed 3.2%.
Balance Sheet Position
Simon Property exited the third quarter of 2022 with $8.6 billion of liquidity. This comprised $1.2 billion of cash in hand, including its share of joint-venture cash, and $7.4 billion of available capacity under the company’s revolving credit facilities.
Share Repurchase
During the quarter, SPG repurchased 405,926 shares of its common stock under its $2.0 billion share repurchase plan.
Dividend Hike
Concurrent with its third-quarter earnings release, Simon Property increased its dividend payment to $1.80 per share compared with the $1.75 paid in the prior quarter. This represents a 2.9% sequential hike and a 9.1% year-over-year increase in its fourth-quarter 2022 dividend. The new dividend will be paid out on Dec 30 to shareholders on record as of Dec 9, 2022.
2022 Guidance Up
Simon Property raised the 2022 comparable FFO per share guidance
It projects the same in the range of $11.83-$11.88, up from $11.70-$11.77 guided earlier. The Zacks Consensus Estimate for the same is currently pegged at $11.65.
Currently, SPG carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Simon Property Group, Inc. Price, Consensus and EPS Surprise
Simon Property Group, Inc. price-consensus-eps-surprise-chart | Simon Property Group, Inc. Quote
Performance of Other REITs
Kimco Realty Corp.’s KIM third-quarter 2022 FFO per share came in at 41 cents, surpassing the Zacks Consensus Estimate of 39 cents. The figure grew 28.1% from the year-ago quarter’s 32 cents.
Results reflect year-over-year growth in the top line. The rise in occupancy levels and rental rate growth aided Kimco’s performance. It raised the 2022 FFO outlook.
SITE Centers Corp. SITC reported third-quarter 2022 operating FFO (OFFO) per share of 29 cents, beating the Zacks Consensus Estimate by a cent. The figure was in line with the prior-year quarter’s FFO per share.
SITC’s results reflect healthy leasing activity and a year-over-year improvement in annualized base rent.
Vornado Realty Trust’s VNO third-quarter 2022 FFO plus assumed conversions as adjusted per share of 81 cents topped the Zacks Consensus Estimate of 74 cents.
Vornado’s results display better-than-anticipated top-line growth. Healthy leasing activity was witnessed across all portfolios.
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.
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
Simon Property Group, Inc. (SPG) : Free Stock Analysis Report
Vornado Realty Trust (VNO) : Free Stock Analysis Report
Kimco Realty Corporation (KIM) : Free Stock Analysis Report
SITE CENTERS CORP. (SITC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
