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HCP Inc.'s (HCP) Q4 FFO Beats on Estimates, Revenues Lag

Using a smartphone to calculate data

HCP Inc.HCP - a healthcare real estate investment trust ("REIT") - reported fourth-quarter 2016 adjusted funds from operations ("FFO") per share of 59 cents, beating the Zacks Consensus Estimate of 57 cents. However, the bottom line came in lower than the prior-year quarter figure of 80 cents.

For full-year 2016, the bottom line came in at $2.74 per share, down from $3.16 recorded in 2015. The Zacks Consensus Estimate for 2016 was pegged at $2.72.

The company posted revenues of $540 million, which missed the Zacks Consensus Estimate of $563 million. However, it came in higher than the year-ago number of $520.3 million.

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For 2016, total revenue came in at $2.13 billion, up from the 2015 figure of $1.94 billion. The Zacks Consensus Estimate for revenues for 2016 was $2.49 billion.

Behind the Headlines

HCP attained year-over-year three-month cash same property portfolio net operating income (NOI) growth of 2.6%.

On Oct 31, 2016, the company completed the spin-off of Quality Care Properties, Inc.

The company completed 1.1 million square feet of leasing in its life science and medical office portfolios, comprising 450,000 square feet of new leases and 668,000 square feet of renewals.

HCP completed $345 million of acquisitions during the reported quarter. During the quarter the company closed $472 million of dispositions.

HCP exited the fourth quarter with cash and cash equivalents of $94.7 million,

Outlook

HCP expects full-year 2017 adjusted FFO per share in a range of $1.89-$1.95. The company anticipates 2016 same property portfolio cash net operating income growth in a range of 2.5-3.5%.

Presently, the Zacks Consensus Estimate for 2017 is currently pegged at $1.93.

Conclusion

We believe that HCP stands to benefit from its diversified portfolio, rise in healthcare spending and an aging population. Strategic investments, tie ups and opportunistic acquisitions are likely to drive decent cash flow. Yet, cutthroat competition and rise in interest rates continue to pose challenges before the company.

Currently, HCP carries a Zacks Rank #3 (Hold).

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

HCP, Inc. Price, Consensus and EPS Surprise

HCP, Inc. Price, Consensus and EPS Surprise | HCP, Inc. 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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