), a real estate investment trust (REIT), is scheduled to report
its fiscal 2012 first quarter earnings after the closing bell on
May 1, 2012. The current Zacks Consensus Estimate for the first
quarter is $1.14 per share, representing a year-over-year growth of
Fourth Quarter Recap
Boston Properties reported fourth quarter 2011 FFO (funds from
operations) of $179.3 million or $1.21 per share, compared with
$89.9 million or $0.64 per share in the year-earlier quarter. Fund
from operations, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization and
other non-cash expenses to net income.
The reported FFO for the quarter surpassed the Zacks Consensus
Estimate by 2 cents. The decrease in fourth quarter 2010 FFO was
primarily due to loss from early extinguishment of debt totaling
approximately $81.7 million or $0.50 per share.
For full year 2011, FFO was $711.0 million or $4.84 per share,
compared with $547.4 million or $3.90 per share in the previous
year. The reported FFO for fiscal 2011 exceeded the Zacks Consensus
Estimate by 2 cents.
Total revenues of the company during the reported quarter were
$452.8 million, compared with $392.5 million in the year-ago
quarter. The quarterly revenues were well above the Zacks Consensus
Estimate of $430 million. For full year 2011, total revenues were
$1.76 billion, compared with $1.55 billion in 2010. The fiscal 2011
revenues were well above the Zacks Consensus Estimate of $1.69
billion. The overall portfolio was 91.3% leased at quarter-end.
Agreement of Analysts
In the last 7 days, there were no upward earnings estimate revision
for the first quarter, while 1 out of 14 analysts covering the
stock revised it downwards. For fiscal 2012, 1 out of 18 analysts
covering the stock raised the earnings estimate in the last 7 days,
while none decreased the same. These represents that the analysts
are slightly bearish about the short-term earnings prospect of the
company, while being bullish on a long-term perspective.
Magnitude of Estimate Revisions
Earnings estimates have remained stagnant in the last 7 days for
the first quarter and full fiscal 2012 at $1.14 and $4.79 per
share, respectively, meaning that the analysts are circumspect
about both the short- and long-term performance of the company.
Boston Properties owns and develops one of the largest Class-A
office, industrial, and hotel properties in the U.S. Boston
Properties concentrates on a few select high-rent, high
barrier-to-entry geographic markets which usually fare better in a
faltering economy. Two of the largest markets of the company, New
Yorkand Washington DC are still among the best of the office
markets in the U.S.
The company also has one of the best balance sheets in the
sector with manageable near-term debt maturities and adequate
liquidity to take advantage of distressed selling as asset values
of office and retail properties continue to drop.
However, Boston Properties has a large development pipeline
which increases operational risks in the current credit-constrained
market, exposing it to rising construction costs, entitlement
delays, and lease-up risk.
We currently have a 'Neutral' recommendation on Boston
Properties with a Zacks #2 Rank, which translates into a short-term
'Buy' rating. We also have a 'Neutral' recommendation and a Zacks
#3 Rank (short-term 'Hold' rating) for
Vornado Realty Trust
), one of the competitors of Boston Properties.
BOSTON PPTYS (
): Free Stock Analysis Report
VORNADO RLTY TR (
): Free Stock Analysis Report
To read this article on Zacks.com click here.