Vornado Realty's Q3 Results To Reflect Non-Recurring Loss
Zacks Investment Research | Oct 03, 2017 09:27PM ET
Vornado Realty Trust (NYSE:VNO) announced that its third-quarter financial results will include certain items that will have an impact of 47 cents loss on its funds from operation (FFO) per share. However, this amount will be excluded to reach adjusted FFO per share.
The non-recurring items will have a loss impact of 51 cents per share, after non-controlling interests, on its net income for the quarter. Similar to FFO, the adjusted net income will exclude the impact.
Vornado incurred transaction costs of $53.6 million related to the spin-off of its Washington D.C. segment — JBG SMITH — on Jul 17. The spun-off company recorded a net income of $3.9 million for the Jul 1 to Jul 17 period. This amount translates to a net income of $10.1 million on a FFO basis.
For the third quarter, Vornado will report the aforementioned figures as discontinued operations.
It will also recognize an unfavorable mark-to-market fair value adjustment, related to its real estate fund, amounting to $7.7 million.
Further, the company will record non-cash impairment loss of $44.5 million related to its investment in Pennsylvania Real Estate Investment Trust (PEI). As part of the sale proceeds of the Springfield Mall in March 2015, Vornado receives operating partnership units of the company.
Lastly, the company will record a net loss of $1.8 million from other items. This translates to $1 million on a FFO basis.
Vornado’s streamlining efforts have resulted in dilution of earnings. This adds to the woes of the company which is already navigating through challenging times.
The Zacks Consensus Estimate for funds from operation (FFO) per share estimate for third-quarter 2017 has been revised downward to 85 cents in a month’s time.
Also, shares of this real estate investment trust (REIT) have underperformed the Zacks Investment Research
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