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Wednesday, Jul 6, 2022

HCP’s Quarter Beats Expectations

HCP Inc. on Tuesday said that higher rental and interest income enabled its funds from operations to nearly double in the fourth quarter, beating analysts’ estimates.

The Long Beach health care real estate investment trust reported FFO of more than $205 million (62 cents per share), compared with $106 million (36 cents) a year earlier. Funds from operations, a key figure for REITs, adds amortization and depreciation to net income to give a clearer idea of cash performance.

Net income soared 415 percent to more than $136.2 million. Revenue increased 15 percent to more than $341 million, with rental income rising 14 percent and interest income up 43 percent.

HCP in December said it will buy all the real estate assets of rehabilitation and nursing home operator HCR ManorCare in a deal valued at $6.1 billion. Adjusting for merger-related costs, the per-share FFO was 64 cents. Wall Street analysts on average had expected adjusted FFO of 60 cents per share on revenue of $304 million.

For the full year, HCP’s FFO rose 53 percent to $626 million ($2.02) while revenue rose 9 percent to $1.26 billion.

For the coming year, the company expects adjusted FFO of between $2.58 and $2.64 per share. The Wall Street consensus is for adjusted FFO of $2.52 per share.

Shares closed up 29 cents, or less than 1 percent, to $37.52 on the New York Stock Exchange.

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