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Federal Realty's (FRT) Q2 FFO and Revenues Miss Estimates

Federal Realty Investment Trust’s FRT second-quarter 2020 funds from operations (FFO) per share of 77 cents missed the Zacks Consensus Estimate of $1.21. Moreover, the reported figure plummeted 52% from the prior-year tally of $1.60.

Total revenues fell 23.5% year over year to $176.2 million in the reported quarter. The top-line figure also missed the Zacks Consensus Estimate of $212.5 million.

Results reflect fall in revenues and leasing activities on a comparable space basis.

The company has collected about 68% of the second quarter and 76% of July billed recurring rents.

Quarter in Details

During the reported quarter, Federal Realty signed 50 leases for 314,679 square feet of retail space. On a comparable space basis, the company leased 277,681 square feet at an average rent of $28.55 per square foot. This denotes cash-basis rollover growth of 11%.

As of Jun 30, 2020, the company’s overall portfolio was 93% leased. As of the same date, the comparable property portfolio was 93.7% leased.

Balance Sheet

Federal Realty exited second-quarter 2020 with cash and cash equivalents of $980 million, up from the $127.4 million recorded at the end of 2019.

During the June-end quarter, the company closed the public offering of its senior notes amounting to $400 million priced at 3.50% with an effective yield of 3.630% due in 2030. It also reopened its senior notes amounting to $300 million due in 2024. The notes are priced at 3.95% with an effective yield of 2.944%.

Further, Federal Realty concluded a $400-million unsecured term loan to repay the outstanding balances under its $1-billion unsecured credit facility. The term loan carries an interest of LIBOR plus 135 basis points (bps). This will mature in May 2021, with the company having an option to extend it till May 2022.

Dividend Update

Federal Realty announced a marginal increase in its regular quarterly cash dividend to $1.06 per share from $1.05. It indicates an annual rate of $4.24 per share.

The dividend will be paid on Oct 15, to shareholders of record as of Sep 22, 2020. This is the 53rd consecutive year that the company has increased its quarterly dividend.

Federal Realty currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Federal Realty Investment Trust Price, Consensus and EPS Surprise

Federal Realty Investment Trust Price, Consensus and EPS Surprise

Federal Realty Investment Trust price-consensus-eps-surprise-chart | Federal Realty Investment Trust Quote

Performance of Other REITs

PS Business Parks, Inc. PSB reported second-quarter 2020 core FFO per share of $1.59, missing the Zacks Consensus Estimate of $1.66. The reported figure also decreased 9.5% year over year.

Extra Space Storage, Inc. EXR delivered core FFO per share of $1.24 for the April-June quarter. The figure came in 6.9% higher than the prior-year quarter’s $1.16. The Zacks Consensus Estimate for the same was pegged at $1.16.

Mack-Cali Realty Corp’s CLI core FFO per share of 28 cents missed the Zacks Consensus Estimate of 31 cents in the second quarter. Moreover, the figure compared unfavorably with the year-ago quarter’s reported number of 40 cents.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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