Highwoods Properties' (HIW) Q2 FFO Beats, Revenues Up Y/Y

Shutterstock photo

Highwoods Properties Inc. HIW reported second-quarter 2018 funds from operations (FFO) of 87 cents per share, marginally beating the Zacks Consensus Estimate. However, the figure compares unfavorably with the year-ago tally of 90 cents.

Results indicate growth in average in-place office cash rent per square foot and GAAP rent for second-generation office space. Nevertheless, the company witnessed decline in same-property cash net operating income (NOI).

Total revenues for the quarter inched up 0.9% year over year to $178.8 million. The revenue figure came in almost in line with the Zacks Consensus Estimate of $179 million.

Quarter in Detail

Highwoods leased 1.1 million square feet of second-generation office space during the second quarter. However, same-property cash NOI edged down 1.1% year over year.

During the reported quarter, the company increased its total development pipeline to $725 million by signing an additional 642,000 square feet of space.

Further, Highwood sold two of its assets for $34 million, which included $31 million for Tower Two in Raleigh and $3 million for non-core industrial land.

The company paid off unsecured notes worth $200 million having an interest rate of 7.50 %. Notably, it did not issue any shares under the ATM program.

As of Jun 30, 2018, Highwoods had $4.2 million of cash and cash-equivalents compared with $31 million reported as of Mar 31, 2018.

2018 Outlook

Highwoods expects 2018 FFO per share of $3.39-$3.45, down from the previous range of $3.37-$3.47. The Zacks Consensus Estimate for the same is currently pegged at $3.44.

Our Viewpoint

Highwoods' operating performance looks encouraging. Also, the company has a diversified and comprehensive real estate portfolio which can stoke growth in net effective rent.

Furthermore, focus on high-quality office assets in best business districts (BBDs) enabled the company to achieve high rent growth and active pre-leasing of pipeline.

Nonetheless, escalating operating and interest expenses remained headwinds.

Highwoods Properties, Inc. Price, Consensus and EPS Surprise

Highwoods Properties, Inc. Price, Consensus and EPS Surprise | Highwoods Properties, Inc. Quote

Highwoods currently carries a Zacks Rank #3 (Hold). You can the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

We now look forward to the earnings releases of other REITs like Alexandria Real Estate Equities, Inc. ARE , Regency Centers Corporation REG and Welltower Inc. WELL . Alexandria and Regency Centers are scheduled to release their quarterly figures on Jul 30 and Aug 2, respectively, while Welltower is slated to report its numbers on Aug 3.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Regency Centers Corporation (REG): Free Stock Analysis Report

Highwoods Properties, Inc. (HIW): Free Stock Analysis Report

Alexandria Real Estate Equities, Inc. (ARE): Free Stock Analysis Report

Welltower Inc. (WELL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: REG , HIW , ARE , WELL

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?