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Ventas' (VTR) Q4 FFO In Line, Revenues Surpass Estimates

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Ventas, Inc.VTR reported fourth-quarter 2016 normalized funds from operations ("FFO") of $1.03 per share, in line with the Zacks Consensus Estimate. The bottom-line figure for the prior-year quarter was also $1.03.

The bottom line for full-year 2016 came in at $4.13 per share, in line with the Zacks Consensus Estimate. The full-year 2015 FFO was $3.95 per share.

The company posted revenues of $875.7 million in the fourth quarter, which beat the Zacks Consensus Estimate of $843 million. Further, it compared favorably with the year-ago tally of $841.3 million.

For full-year 2016, revenues came in at $3.44 billion, up from the 2015 tally of $3.29 billion.

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Modest NOI Growth

For the fourth quarter, same-store cash net operating income ("NOI") growth for total portfolio (1,189 assets) was 2.9% on a reported basis. Notably, triple net same-store cash NOI grew 4.5%, the seniors housing operating portfolio same-store NOI grew 1.1% and the medical office building portfolio rose 2.1%.

Notable Portfolio Activity

The company expects to close its $700 million loan commitment to fund Ardent Health Services' acquisition of LHP Hospital Group late in first-quarter 2017.

In Jan 2017, Ventas sold assets and received final repayment on loans receivable for proceeds of $88 million.

Liquidity

Presently, the company has more than $2 billion available under its revolving credit facility and $286.7 million of cash or cash equivalents in hand.

2017 Outlook

The company anticipates same-store cash net operating income growth of 1.5-2.5% in 2017.

Further, Ventas expects dispositions of $900 million in 2017. It intends to use the net proceeds to expand the company's life science and acute care hospital platforms and for debt repayment.

Our Take

Going forward, we believe that Ventas' adequate size and scale would help it capitalize on opportunities such as increasing healthcare spending, aging population and a rise in insured individuals. Yet, stiff competition and a projected rise in interest rates keep us concerned.

Currently, Ventas carries a Zacks Rank #4 (Sell).

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

Ventas, Inc. Price, Consensus and EPS Surprise

Ventas, Inc. Price, Consensus and EPS Surprise | Ventas, Inc. Quote

We now look forward to the earnings releases of DDR Corp. DDR , Vornado Realty Trust VNO and HCP, Inc. HCP 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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