Kimco Realty Corporation
), a real estate investment trust (REIT), is scheduled to report
its second quarter 2012 earnings on July 31, 2012 after the closing
bell. The current Zacks Consensus Estimate for the second quarter
is pegged at 31 cents per share, representing a year-over-year
growth of about 1.9%.
First Quarter Recap
Kimco reported total revenue of $231.4 million in first quarter
2012 compared with $225.1 million in the year-earlier quarter - an
increase of 2.8%. Total revenue for the reported quarter exceeded
the Zacks Consensus Estimate of $228 million.
Kimco reported first quarter 2012 FFO (funds from operations) of
$126.2 million or 31 cents per share compared with $122.0 million
or 30 cents per share in the year-ago period. Funds 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.
Agreement of Analysts
In the last 7 days, one out 14 analysts raised an estimate
for 2012 while none revised estimates for 2013. This
signifies that the earnings estimates are skewed towards a slightly
Magnitude of Estimate Revisions
For full-year 2012, the company expects recurring FFO in the
range of $1.22 to $1.26 per share. The Zacks Consensus Estimate for
2012 has remained constant over the last 7 days at $1.24 per share,
which is at the higher end of the company's guidance. For 2013, the
Zacks Consensus Estimate remained unchanged over the last 7 days at
$1.32 per share.
Kimco, together with its subsidiaries, is the largest
publicly traded owner and operator of neighborhood and community
shopping centers in the U.S.
Kimco generally signs long-term leases with high-credit tenants,
which limits the downside risk and provides a steady source of
income. Given the current uncertainty in the capital markets, Kimco
has also modified its business strategy to focus on core retail
The company intends to concentrate its future investments on the
neighborhood and community shopping center segment, primarily
focusing on the North American market. This provides a strong
upside potential for the top-line growth of the company.
However, Kimco faces stiff competition from other players in the
market for the acquisition of properties for its tenants and for
other real estate investment opportunities. Consequently, the
company has to continually invest in value drivers that act as a
hedge against competition, which undermines its long-term growth
Kimco currently retains a Zacks #2 Rank, which translates into a
short-term Buy rating. We are also maintaining our long-term
Neutral recommendation on the stock. One of its competitors,
Simon Property Group Inc
), also holds a Zacks #2 Rank.
KIMCO REALTY CO (KIM): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
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