HCP Inc. (HCP), a real estate investment trust, Tuesday reported an increase in funds from operation in the second-quarter, but profit declined from the same quarter a year ago. Quarterly revenues increased from last year and came in ahead of the Street estimates. The company lowered its earnings forecast for the full year 2009, while reaffirming its FFO guidance.
Funds from operations applicable to common shares for the second-quarter increased to $146.1 million or $0.55 per share from $119.1 million or $0.50 per share in the comparable quarter a year ago.
The company said FFO applicable to common shares for the quarter included offsetting impact of measures such as impairments of $0.02 per share, income of $0.02 per share that resulted from an adjustment to the cost allocation of certain assets acquired in 2006.
Quarterly FFO , however, included the negative impact of $0.07 per share related to impairments, merger-related charges of $0.05 per share, write down charges of marketable securities of $0.01 per share, and an ineffectiveness charge of $0.01 per share that stemmed from the settlement of two forward-starting interest-rate swaps.
Quarterly net income applicable to common shares, however, declined to $91.8 million or $0.35 per share from $225.9 million or $0.96 per share in the same quarter a year ago.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.51 per share for the quarter. Analysts' estimates typically exclude special items such as one-time charges or gains.
Quarterly net income included a gain of $30.5 million related to sales of real estate, down from similar gain of $190.5 million recorded in the same quarter last year.
Income from continuing operations for the second quarter, however, improved to $69.365 million or $0.23 per share from $49.396 million or $0.16 per share in the same quarter a year ago.
Quarterly revenues, however, improved to $267.34 million from $248.77 million in the same quarter last year, above Street estimates of $249.27 million.
For the six-month period, funds from operations applicable to common shares increased to $278.621 million or $1.05 per share from $240.475 million or $1.06 per share in the same quarter a year ago.
Net income for the period rose to $135.069 million or $0.52 per share from $270.729 million or $1.19 per share last year.
Revenues for the period improved to $518.951 million from $439.569 million in the same period a year ago.
Looking ahead to fiscal 2009, the company continues to see funds from operations before impairments in the range of $2.15 per share to $2.21 per share.
The company, however, lowered its earnings forecast for the year to a range of $0.98 per share to $1.04 per share from the prior guidance ranging from $1.00 per share to $1.06 per share.
Wall Street analysts currently estimate earnings of $2.08 per share for the full year 2009.
HCP is currently trading at $25.84, up $0.06 or 0.27%, on a volume of 3.826 million shares on the NYSE.
For comments and feedback: editorial@rttnews.com