Simon Property (SPG) Beats Q3 FFO & Revenues, Guides Up
Zacks Investment Research | Oct 25, 2016 10:53PM ET
Simon Property Group, Inc. (NYSE:SPG) , a retail real estate investment trust (“REIT”), reported third-quarter 2016 funds from operations (“FFO”) of $2.70 per share, up from the year-ago quarter tally of $2.54. The Zacks Consensus Estimate for the quarter was $2.68. Growth in operating income and transformative redevelopments aided the results.
Simon Property posted revenues of $1.36 billion, beating the Zacks Consensus Estimate of $1.35 billion. The year-ago quarter revenue figure was of $1.32 billion.
Quarter in Detail
For the U.S. Malls and Premium Outlets portfolio, occupancy rose 20 basis points (bps) year over year to 96.3% at the end of the third quarter. Base minimum rent per square feet rose 4.5% year over year to $50.76, while releasing spread for the trailing 12-months rose 10.9% to $6.71.
During the quarter, Simon Property completed the transformation of King of Prussia that includes completion of a 155,000 square foot expansion. At the end of the quarter, Simon Property had redevelopment and expansion projects in progress at 32 properties across the U.S. and Europe.
In September, Simon Property, as part of a consortium closed the acquisition of Aéropostale, the global trend-focused apparel and accessories brand.
The company exited the third quarter with cash and cash equivalents of $814.7 million compared with $701.1 million at the end of fourth-quarter 2015.
2016 Outlook
Simon Property raised its 2016 FFO per share guidance. It expects it to be in the range of $10.85–$10.87 from the earlier range of $10.77–$10.85. The Zacks Consensus Estimate for the same is currently pegged at $10.85.
Dividend Update
Concurrent with its earnings release, Simon Property declared a quarterly dividend of $1.65 per share, marking 7.4% year over year. The dividend will be paid on Nov 30 to shareholders on record as of Nov 16.
Our Viewpoint
Strong financial as well as operational performance is expected to drive the company’s growth, going forward. The gradually recovering U.S. economy and improvement in the spending power of the customers will further aid the company’s development.
SIMON PROPERTY Price, Consensus and EPS Surprise
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