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Boston Properties (BXP) Q3 FFO and Revenues Beat Estimates

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Boston Properties Inc. 's BXP third-quarter 2017 funds from operations (FFO) per share of $1.57 surpassed the Zacks Consensus Estimate of $1.54. The figure also came in higher than the year-ago quarter tally of $1.42.

In addition, quarterly FFO per share exceeded the company's previously guided range of $1.52-$1.54. Results indicated an improvement in portfolio revenues, and development and management services revenues.

Total revenues during the quarter increased 5.2% year over year to $657.7 million. The figure also comfortably surpassed the Zacks Consensus Estimate of $631.5 million. The increase was primarily supported by higher rental revenues. Rental revenues were up 4.5% year over year to $633.8 million.

Boston Properties, Inc. Price, Consensus and EPS Surprise

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

Note: The EPS numbers presented in the above chart represent funds from operations (FFO) per share.

Property Update

As of Sep 30, 2017, Boston Properties' portfolio comprised 177 properties, covering a total of around 49.8 million square feet of space. This included 10 under-development properties, covering an area of 5.7 million square feet.

The overall operating portfolio, including 164 properties (excluding two residential properties and hotel), was 90.2% leased as of Sep 30, 2017.

Liquidity Increases

Boston Properties exited the third quarter with cash and cash equivalents of around $493.1 million, up from $356.9 million as of Dec 31, 2016.

Outlook

Boston Properties updated its full-year 2017 FFO per share guidance to $6.24-$6.25 from $6.20-$6.25 provided earlier. The Zacks Consensus Estimate is pegged at $6.24.

The company projects its fourth-quarter 2017 FFO per share in the range of $1.53-$1.54. The Zacks Consensus Estimate currently stands at $1.54.

Our Viewpoint

Boston Properties is well poised for growth, backed by properties located in select high-rent, high barrier-to-entry geographic markets, diversified tenant and industry base. Also, with economic improvement and recovery in job market, healthy growth in demand for office spaces is expected to strengthen the company's growth opportunities.

However, several big companies are choosing to resize their businesses and contain costs, which are leading to lower demand for office space. In addition, there is growth in supply of office space in the market and this remains a concern because higher supply usually leads to lesser absorption and curtails the landlord's capability to demand more rents.

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

The stock has lost 3% year to date versus 3% rally recorded by the industry it belongs to.

Upcoming Releases

We now look forward to the earnings releases of some other companies like EPR Properties EPR , Lamar Advertising Company LAMR and Outfront Media Inc. OUT . EPR Properties is scheduled to announce results on Nov 8 while Lamar Advertising Company and Outfront Media are slated to report on Nov 6.

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.

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


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

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