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Boston Properties (BXP) Trumps Q3 FFO & Revenue Estimates

Zacks Equity Research

Boston Properties Inc.’s BXP third-quarter 2019 funds from operations (FFO) per share of $1.64 surpassed the Zacks Consensus Estimate of $1.62. Nonetheless, the reported tally remained flat year over year.

Higher occupancy buoyed the company’s results in the quarter. Further, total revenues witnessed 8% year-over-year growth.

Revenues from lease came in at $692.23 million, outpacing the Zacks Consensus Estimate of $680.7 million. The reported tally also improved roughly 1.7% from the prior quarter’s tally of around $680.2 million.

Property Update

As of Sep 30, 2019, Boston Properties’ portfolio comprised 196 properties, covering a total of around 51.9 million square feet of space. This included 13 under-construction properties.

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Total portfolio occupancy for the company’s in-service office properties was 92.6% as of Sep 30, 2019, indicating a year-over-year expansion of 150 basis points.

During the September-end quarter, Boston Properties purchased 880 and 890 Winter Street in Waltham, MA for $106 million. The 880 and 890 Winter Street comprises two Class A office properties, spanning around 392,000 square feet of space, and is 82% leased.

Liquidity

Boston Properties exited the third quarter with cash and cash equivalents of $751.2 million, up from $543.3 million as of Dec 31, 2018.

Outlook

The company has provided its fourth-quarter 2019 FFO per share guidance of $1.84-$1.86. The Zacks Consensus Estimate is pegged at $1.82.

For full-year 2019, Boston Properties has revised its FFO per share guidance to $6.98-$7. The Zacks Consensus Estimate for 2019 FFO per share is $6.95.

Moreover, for 2020, the company provided preliminary FFO per share guidance of $7.45-$7.65. This indicates 8% year-over-year growth at the mid-point, relative to the 2019 projections. The Zacks Consensus Estimate for 2019 FFO per share is $7.48.

Our Viewpoint

During the quarter, Boston Properties partially placed in service several development projects. This included The Hub on Causeway – Residential. The 320,000-square-foot residential property comprises 440 units and is situated in Boston, MA. These development projects will likely contribute to the company’s top-line growth in the upcoming quarters, and hence are encouraging.

Boston Properties, Inc. Price, Consensus and EPS Surprise

Boston Properties, Inc. Price, Consensus and EPS Surprise
Boston Properties, Inc. Price, Consensus and EPS Surprise


Boston Properties, Inc. price-consensus-eps-surprise-chart | Boston Properties, Inc. Quote

Boston Properties currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

Highwoods Properties Inc.’s HIW third-quarter FFO per share of 88 cents surpassed the Zacks Consensus Estimate of 85 cents. The reported tally excluded the net impact of 5 cents relating to the company’s market rotation plan. The figure also improved 2.3% year over year.

Cousins Properties Incorporated CUZ reported third-quarter 2019 FFO per share (before TIER transaction costs) of 72 cents, outpacing the Zacks Consensus Estimate of 69 cents. Further, the figure came in higher than the prior-year quarter’s reported tally of 63 cents.

Ventas, Inc. VTR delivered third-quarter 2019 normalized FFO per share of 96 cents, beating the Zacks Consensus Estimate of 94 cents. However, the figure came in lower than the year-ago tally of 99 cents.

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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