Health Care REIT Q1 FFO Surges, Cuts Full Year Outlook - Update

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5/8/2012 1:44 PM ET

Health Care REIT Inc. (HCN: Quote) said Tuesday its funds from operations or FFO for the first quarter surged from last year on robust growth in rental revenue and resident fees. FFO per share for the quarter matched Street estimates.

Moving forward, Health Care REIT cut its FFO outlook for the full year 2012, citing the impact of normalizing items. The company's stock is currently down 2 percent on the New York Stock Exchange.

The Toledo, Ohio-based Health Care REIT mainly invests in senior living and health care properties. The company reported first-quarter FFO of $163.9 million or $0.81 per share, up from $71 million or $0.46 per share last year. Excluding items, normalized FFO for the quarter was $174.5 million or $0.87 per share, compared to $108 million or $0.70 per share in the prior year.

On average, 12 analysts polled by Thomson Reuters expected FFO of $0.87 per share for the quarter. Analysts' estimates typically exclude special items.

Net income for the quarter was $39 million or $0.19 per share, compared to $23 million or $0.15 per share a year ago. REIT companies usually add depreciation and other items that usually reduce their net earnings.

Gross revenue for the quarter was $435.4 million, compared to $245.8 million last year. Analysts expected revenue of $417.96 million for the quarter.

For the full year 2012, the company now expects FFO of $3.45 to $3.55 per share, and normalized FFO of $3.50 to $3.60 per share. It earlier estimated FFO of $3.53 to $3.63 per share. Analysts currently expect FFO of $3.65 per share for 2012.

The company said it is revising its 2012 guidance to reflect investment and financing activity and certain normalizing items, and to increase its disposition guidance from $200 million to $300 million which consists primarily of non-strategic, Medicaid-oriented skilled nursing facilities.

The company now anticipates 2012 net income of $1.09 to $1.19 per share, compared to its prior outlook of $1.26 to $1.36 per share.

HCN is trading at $55.45, down $1.20 or 2.12%, on the NYSE. In the past year, the stock has traded in a range $41.03 to $57.95.

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by RTT Staff Writer

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