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Ventas' (VTR) FFO and Revenues Surpass Estimates in Q4

·3 min read

Ventas, Inc. VTR reported fourth-quarter 2021 normalized funds from operations (FFO) per share of 73 cents, beating the Zacks Consensus Estimate of 71 cents. However, the figure declined 12% from the year-ago quarter’s reading.

VTR generated revenues of $1.02 billion in the fourth quarter, which surpassed the Zacks Consensus Estimate of $972.6 million. The top line increased 11% year over year.

The quarterly results reflect occupancy improvement in the Senior Housing Operating Portfolio (SHOP) segment.

For 2021, Ventas reported normalized FFO per share of $2.90, down 12.7% from the prior year’s $3.32. The reported figure, nonetheless, outpaced the Zacks Consensus Estimate of $2.87. Total revenues of $3.82 billion improved marginally year over year.

Quarter in Detail

For the fourth quarter, same-store cash NOI growth for the total property portfolio (1,135 assets) increased 0.2%, sequentially. Segment wise, the same-store cash NOI for the office portfolio decreased 0.1% from the prior quarter’s level. While same-store cash NOI for the triple-net leased (NNN) portfolio was flat, the same inched up 0.5% for the SHOP portfolio, on a sequential basis.

The SHOP portfolio’s same-store average occupancy expanded 200 basis points to 83.4% in the fourth quarter of 2021 from the fourth-quarter 2020 level.

Balance-Sheet Position

Ventas exited fourth-quarter 2021 with cash and cash equivalents of $149.7 million, up 4.1% from $143.8 million recorded as of the third-quarter end. For the December quarter, net debt to adjusted pro forma EBITDA ratio was 7.2X, in line with the September-quarter level.

VTR had $2.5 billion of year-end liquidity.

Outlook

Ventas projects first-quarter 2022 normalized FFO per share in the range of 76-80 cents. The Zacks Consensus Estimate for the same is pegged at 69 cents.

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

Ventas, Inc. Price, Consensus and EPS Surprise

Ventas, Inc. Price, Consensus and EPS Surprise
Ventas, Inc. Price, Consensus and EPS Surprise

Ventas, Inc. price-consensus-eps-surprise-chart | Ventas, Inc. Quote

Performance of Other REITs

Alexandria Real Estate Equities, Inc. ARE reported an adjusted FFO of $1.97 per share for fourth-quarter 2021, up 7.1% from the year-ago quarter’s $1.84. The figure surpassed the Zacks Consensus Estimate of $1.96.

The year-over-year improvement in ARE’s FFO was led by 24.4% top-line growth to $576.9 million. Results reflected decent internal growth. Alexandria witnessed a steady healthy leasing activity and rental rate growth during the quarter.

Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported fourth-quarter 2021 core FFO per share of $1.90, surpassing the Zacks Consensus Estimate of $1.87. The reported number increased 15.2% from the year-ago figure of $1.57.

MAA’s quarterly results were driven by an increased average effective rent per unit for the same-store portfolio. The average physical occupancy for the same-store portfolio also increased year over year.

Equity Residential’s EQR fourth-quarter 2021 normalized FFO per share of 82 cents outpaced the Zacks Consensus Estimate of 80 cents. Rental income of $645.1 million also beat the consensus mark of $628.6 million.

On a year-over-year basis, Equity Residential’s normalized FFO per share improved 7.9%, while rental income rose 5.2%. EQR’s results were driven by a strong physical occupancy, a substantially improved pricing power and higher non-Residential revenues.

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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