Kimco Realty Corporation
), a real estate investment trust (REIT), reported adjusted FFO
per share of 33 cents, beating the Zacks Consensus Estimate by 2
cents and the year-ago quarter figure by 3 cents. The results
were aided by better-than expected growth in revenue.
KIMCO REALTY CO (KIM): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
SUPERVALU INC (SVU): Free Stock Analysis
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For full year 2012, the company's adjusted FFO per share came in
at $1.26, a cent ahead of the Zacks Consensus Estimate of $1.25
and 6 cents above the prior-year figure of $1.20 per share.
Total revenue of $239.5 million during the reported quarter, was
up 8.4% year over year and exceeded the Zacks Consensus Estimate
of $228 million. For full year 2012, the company booked total
revenue of $922.3 million, up 7.1% from a year ago and was ahead
of the Zacks Consensus Estimate of $911 million.
Including non-operating impairments and transactional income and
expenses, FFO, on a reported basis, was $127.2 million or 31
cents per share in the reported quarter, slightly down from
$135.4 million or 33 cents per share in the year-ago period. The
decrease stemmed from a non-cash charge related to redemption of
the company's Class G preferred shares in Oct 2012, and was
partly mitigated by a rise in net operating income.
For full year 2012, FFO was $510.4 million or $1.25 per share,
compared with $517.8 million or $1.27 per share reported a year
Quarter in Detail
Overall gross occupancy in Kimco's combined shopping center
portfolio was 93.8% at the end of the quarter, an increase of 70
bps from the prior-year quarter. In the U.S. portfolio, gross
occupancy was also 93.9%, an increase of 80 bps compared with the
Same-store net operating income (NOI) in the combined portfolio
increased 3.4% year over year. Same-store NOI in the U.S.
portfolio climbed 3.1% over the same period.
During the reported quarter, Kimco executed a total of 605 leases
in the combined portfolio, spanning 1.9 million square feet.
Pro-rata leasing spreads in the U.S. portfolio increased 11.8%
(cash basis), including 25.5% for new leases, and 6.1% for
Notable Activities during 4Q
During the reported quarter, Kimco acquired 7 properties
(spanning 329,000 square feet) in core markets for its
consolidated portfolio for $96.2 million, including $20 million
of mortgage debt. In addition, the company shelled out $29.6
million for purchasing the remaining ownership interest in 2
unencumbered shopping centers from its joint venture partners
comprising 189,000 square feet.
Furthermore, during the reported quarter, Kimco sold 34 retail
properties (spanning 3.9 million square feet) for about $246.1
million, including $35.4 million of mortgage debt. Its share from
the sales proceed was $180.2 million. Noteworthy among the
dispositions were the sale of 2 shopping center portfolios in
Ohio and Ind. that aggregated 22 properties for $131.1 million.
At year-end 2012, Kimco had $1.7 billion of liquidity, with a
consolidated net debt to adjusted EBITDA (earnings before
interest, tax, depreciation and amortization) ratio of 5.7x
compared to 6.2x from the prior year.
For full year 2013, the company reiterated its recurring FFO per
share guidance of $1.28 -$1.33.
Kimco announced a quarterly cash dividend of 21 cents per share
on its common stock. The dividend will be paid on Apr 15, 2013 to
shareholders of record on Apr 3.
We are encouraged by the better-than-expected results at Kimco.
With a geographically diversified portfolio, concentrated mostly
in high-income, high-growth areas, Kimco is a leading owner and
operator of neighborhood and community shopping centers in the
The company is currently focusing on its core business activities
to tide over the volatility in the market. In Jan 2013, the
company disclosed its participation in the consortium to acquire
5 grocery banners totaling 877 locations from
) and a tender offer for up to 30% percent of the outstanding
SUPERVALU shares. Such strategic moves are expected to position
the company well for better growth going forward.
In addition, it has a strong balance sheet with easy access to
capital to allow continued growth. However, stiff competition
from other players in the market undermines its growth potential
to some extent.
Kimco currently retains a Zacks Rank #4 (Sell). However, one can
consider 2 other stocks in the REIT industry -
Simon Property Group Inc.
), both carrying a Zacks Rank #2 (Buy).
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.