Boston Properties Inc.
), a real estate investment trust (REIT), reported second quarter
2012 FFO (funds from operations) of $206.8 million or $1.37 per
share, compared with $181.6 million or $1.23 per share in the
year-earlier quarter. The reported FFO for the quarter beat the
Zacks Consensus Estimate by 13 cents. The year-over-year increase
in FFO was driven by higher rental revenue.
We cover below the results of the recent earnings announcement,
as well as the subsequent analyst estimate revisions and the Zacks
ratings for the short-term and long-term outlook for the stock.
Earnings Report Review
Total revenue during the quarter were $472.9 million, compared
with $433.9 million in the year-ago quarter. The quarterly revenues
were well above the Zacks Consensus Estimate of $425 million. The
overall portfolio was 91.6% leased at quarter end.
Boston Properties ended second quarter 2012 with cash and cash
equivalents of $1.7 billion.
Read our full coverage on this earnings report:
Boston Properties Beats Estimates
Earnings Estimate Revisions - Overview
Fiscal earnings estimates for Boston Properties have moved in
both directions and remained unchanged since the earnings release,
implying that the analysts are cautious about the long-term
performance of the company. Let's dig into the earnings estimate
Agreement of Estimate Revisions
In the last seven days, the earnings estimates for 2012 were
increased by two out of the 15 analysts covering the stock, and
decreased by one during the same time period. For 2013, three out
of the 17 analysts covering the stock increased their earnings
estimates and two decreased the same. This indicates that the
fiscal year earnings estimate revisions are a mixed bag for Boston
Magnitude of Estimate Revisions
Earnings estimate for 2012 has increased by a penny over the
last seven days to $4.88 per share. For 2013, earnings estimates
have remained constant at from $5.29 during the same time period,
which indicates that the analysts are cautious about the future
performance of the company
The long-term earnings estimate picture for Boston Properties is
Neutral. 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 York and Washington DC, are still among the best office markets
in the U.S.
Boston Properties has a strong and dedicated management team,
which is one of the most respected and accomplished in the
industry. The company benefits from the reputation and
relationships of its key personnel with the industry as a whole.
This helps inculcate further profitable business and investment
However, Boston Properties face significant competition from
developers, owners and operators of office properties and other
commercial real estate, including sublease space available from its
tenants. This influences its ability to attract and retain tenants
at relatively high rents than its competitors, and adversely
affects its long-term profitability.
Boston Properties currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating. We also maintain our
long-term Neutral recommendation on the stock. One of its
Vornado Realty Trust (
also holds a Zacks #3 Rank.
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. FFO per
share in the reported quarter was in line with the Zacks
About Earnings Estimate Scorecard
As a PhD from MIT, Len Zacks proved over 30 years ago that
earnings estimate revisions are the most powerful force impacting
stock prices. He turned this ground breaking discovery into two
of the most celebrated stock rating systems in use today. The
Zacks Rank for stock trading in a one to three month time horizon
and the Zacks Recommendation for long-term investing (6+ months).
These "Earnings Estimate Scorecard" articles help analyze the
important aspects of estimate revisions for each stock after
their quarterly earnings announcements. Learn more about earnings
estimates and our proven stock ratings at
BOSTON PPTYS (BXP): Free Stock Analysis Report
VORNADO RLTY TR (VNO): Free Stock Analysis
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