Cousins Properties (CUZ) Q1 FFO Meets Estimates, Revenues Up

Cousins Properties Incorporated (NYSE:CUZ) reported funds from operations (FFO) per share of 20 cents, in line with the Zacks Consensus Estimate. Further, the figure comes in higher than the prior-year tally of 15 cents. However, due to lack of investors’ optimism, the stock fell slightly (0.21%) after the release.

Cousin Properties’ first-quarter 2019 revenue figure recorded year-over-year growth. Further, the company witnessed increase in same-property cash net operating income (NOI).

Rental property revenues for the quarter came in at $123.3 million, which compares favorably with $113.3 million witnessed in the year-ago quarter. Moreover, the figure outpaced the Zacks Consensus Estimate of $122.1 million.

Quarter in Detail

Cousins Properties executed leases for 682,129 square feet of office space in the January-March quarter. Same-property NOI, on a cash basis, increased 4% from the year-ago quarter. Moreover, second-generation net rent per square foot (cash basis) increased 7.1%.

During the reported quarter, the company commenced operations at Dimensional Place, a 281,000-square-foot office building situated in the South End submarket of Charlotte.

Further, the company signed a number of agreements with Norfolk Southern (NYSE:NSC) Railway Company. Per the agreements, the company will develop a new corporate headquarter for the later, recognizing associated fee income of $52.3 million. The company purchased 1200 Peachtree, a 370,000-square-foot office building in Midtown Atlanta, for $82 million.

Cousins Properties also entered into an agreement with TIER REIT to acquire the later in a 100% stock-for-stock deal.

Cousins Properties sold air rights worth $13.3 million, which cover eight acres in Downtown Atlanta.

Cousins Properties exited the first quarter with cash and cash equivalents of $3.5 million compared with $2.5 million recorded as of Dec 31, 2018.

2019 Outlook

Cousins Properties has revised its guidance for full-year 2019 FFO per share. The company expects FFO per share to be in the band of 70-74 cents compared to the previous guidance of 70-75 cents. The Zacks Consensus Estimate for the current-year FFO per share is currently pinned at 70 cents.

The projections for same property net operating income growth have been revised to 3-5% from 2-4%. Furthermore, the company now anticipates general and administrative expenses, net of capitalized salaries, in the range of $33.5-$35.5 million, up from the earlier estimate of $27-$29 million. Cousins Properties does not expect to sell Meridian Mark Plaza this year.

Conclusion

The company’s properties located in premium sun-belt markets have enabled it to enjoy robust rent growth that boosted its top-line performance during the quarter. Additionally, year-over-year growth in same property net operating income and fee income supported results.

Cousins Properties Incorporated Price, Consensus and EPS Surprise

Cousins Properties Incorporated Price, Consensus and EPS Surprise | Cousins Properties Incorporated Quote

Currently, Cousins Properties has a Zacks Rank #2 (Buy). You can the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

Duke Realty Corporation’s (NYSE:DRE) first-quarter 2019 core FFO per share of 33 cents surpassed the Zacks Consensus Estimate of 32 cents. Moreover, the figure came in ahead of the year-ago quarter’s reported tally of 30 cents. Results indicate overall improved operations as well as increased investments in new industrial properties.

Highwoods Properties Inc.’s (NYSE:HIW) first-quarter FFO per share of 72 cents missed the Zacks Consensus Estimate of 84 cents. The figure also compared unfavorably with the year-ago reported tally of 85 cents. Results were negatively impacted by the sudden closure of the company’s tenant Laser Spine Institute.

SITE Centers Corp. (NYSE:SITC) posted first-quarter 2019 operating FFO per share of 32 cents, outpacing the Zacks Consensus Estimate of 29 cents. Results reflected growth in same-store net operating income.

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

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