American Homes Fall Short of Forecasts

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American Homes 4 Rent reported Thursday that its revenue skyrocketed in the third quarter on strong leasing activity, but it still missed Wall Street estimates for its funds from operations.

The Agoura Hills single-family landlord reported FFO of $19.6 million (9 cents a share) for the third quarter ended Sept. 30. Revenue rose 173 percent to $49.5 million.

FFO is a REIT metric that adds amortization and depreciation expenses into net income to get a better picture of cash flow. Analysts had expected FFO of 11 cents on revenue of $50 million, according to Thomson Financial. On a net income basis, the company lost $3.9 million (-5 cents).

“During the quarter, we continued to execute on our core strategic initiatives to acquire and renovate rental homes in select markets and lease them at attractive yields, resulting in triple-digit percentage increases in revenues and net operating income,” said Chief Executive David P. Singelyn, in a statement.

It is the company’s second earnings report since going public, after an initial August report in which it posted a loss of $14 million in net income. Concurrently, there were reports American Homes laid of 15 percent of its employees.

American Homes is the second-largest owner of single-family homes in the country, with 21,267 properties as of Sept. 30. It has struggled as the recovering home market has raised its acquisition costs.

The stock still hovers around its IPO price of $16 a share, dropping a penny on Thursday to close at $16.04 prior to the release of the earnings report. The stock lost another penny in after-hours trading.

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