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DDR Corp (DDR) Falls Short of Q4 FFO and Revenue Estimates

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DDR Corp. 's DDR fourth-quarter 2016 funds from operations ("FFO") per share of 30 cents were lower than both the Zacks Consensus Estimate and the prior-year quarter tally by a cent. Following the release, in a day's trading, shares of the company were down 3.6%.

The real estate investment trust ("REIT") posted revenues of $232.2 million in the reported quarter. The adjusted revenues were $226.5 million. The Zacks Consensus Estimate for revenues was $240.1 million.

For full-year 2016, the company reported FFO per share of $1.28, higher than the prior-year figure of $1.23.

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Quarter in Detail

DDR inked 272 new and renewal leases for 1.9 million square feet of space during the reported quarter. On a pro rata basis and excluding Puerto Rico, the company generated new leasing spreads of 21.3% and renewal leasing spreads of 8.3%. Also, same-store net operating income ("NOI"), excluding Puerto Rico, climbed 2.5% year over year on a pro rata basis.

As of Dec 31, 2016, the company's portfolio was 95% leased, down 40 basis points sequentially. Annualized base rent per occupied square foot increased 4.7% on a pro rata basis to $15.46 as of Dec 31, 2016, from $14.76 at the end of the year-ago quarter.

During the quarter, DDR acquired two shopping centers for $148 million at its share. Also, the company sold seven assets and nine land parcels for $833 million, at its share.

DDR exited the fourth quarter with $30.4 million in cash compared with $22.4 million as of Dec 31, 2015.

2017 Outlook

DDR has provided outlook for 2017. The company expects the 2017 operating FFO per share to be in the range of $1.12-$1.16. The Zacks Consensus Estimate for the same is currently pegged at $1.15.

Further, the company anticipates its disposition guidance for full-year 2017 in the range of $800 million to $1 billion at its pro rata share. Also, it targets 2017 acquisition of $100 million. Same store NOI growth is expected to be in the range of 1-2% for the full year.

To Conclude

Stiff competition, increasing online sales and rise in interest rate pose concerns for the company.

However, its diversified portfolio, concentrated mostly in prosperous regions, helps in generating relatively stable revenues. Further, the presence of well-capitalized tenants in its roster keeps its growth momentum going.

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

DDR Corp. Price, Consensus and EPS Surprise

DDR Corp. Price, Consensus and EPS Surprise | DDR Corp. Quote

We now look forward to the earnings releases of Realty Income Corporation O , Host Hotels & Resorts, Inc. HST and Welltower Inc. HCN , which are expected next week.

Note: All EPS numbers presented in this write-up represent funds from operations ("FFO") per share. 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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