Regency Centers Corporation
), a real estate investment trust (REIT), reported second quarter
2012 FFO (funds from operations) of $61.3 million or 68 cents per
share, compared with $55.1 million or 61 cents in the year-earlier
We cover below the results of the recent earnings announcement,
as well as the subsequent analysts' estimate revisions and the
Zacks ratings for the short and long-term outlook on the stock.
Second Quarter Review
Excluding non-recurring items, recurring FFO for the reported
quarter stood at $62.5 million or 69 cents per share versus $50.5
million or 56 cents in the year-ago period.
The company reported total revenues of $129.8 million in the
second quarter of 2012, compared with $124.6 million in the
Read our full coverage on this earnings report:
Regency Beats Estimates
Earnings Estimate Revisions - Overview
Fiscal earnings estimates have moved in both directions since
the earnings release. It suggests that the analysts are cautious
about the long-term performance of the company. We take a
look at the earnings estimate detail.
Agreement of Estimate Revisions
In the last seven days, the earnings estimates for 2012 were
increased by two out of the eight analysts covering the stock,
while none decreased the same. For 2013, three out of the 12
analysts covering the stock decreased their earnings estimates and
none increased it during the same time period. This indicates that
the fiscal year earnings estimate revisions are a mixed bag for
Magnitude of Estimate Revisions
Earnings estimate for 2012 has increased by a penny over the
last seven days to $2.47 per share. For 2013, earnings estimates
have decreased from $2.60 to $2.56 during the same time period,
which indicates that the analysts are pessimistic about the future
performance of the company.
The long-term earnings estimate picture for Regency is neutral.
With properties in high income, high-barrier to entry markets,
Regency's retail strip center portfolio is among the best in the
sector, which allows it to continually perform at the top-end of
its peer group. The company's dominant anchor tenants are grocery
stores, a segment that is comparatively less affected in a
challenging economy. Consequently, Regency has a relatively steady
source of revenue.
Regency maintains a conservative capital structure and follows a
self-funding capital strategy to fund growth, which includes
disposal of non-strategic assets and a continued focus on
industry-leading co-investment partnership programs. This augurs
well for the long-term.
However, Regency has an active development pipeline, which
increases operational risks in the current credit-constrained
market. It also exposes the company to rising construction
costs, entitlement delays, and lease-up risk. As such, we are
skeptical about the long-term earnings potential of the company
Regency 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 competitors
, Kimco Realty Corporation
) currently retains a Zacks #2 Rank, which translates into a
short-term Buy rating.
Note: FFO, 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.
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
KIMCO REALTY CO (KIM): Free Stock Analysis
REGENCY CTRS CP (REG): Free Stock Analysis
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