Macerich (MAC) Q4 FFO & Revenues Beat Estimates, Stock Rises – February 11, 2022

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Shares of The Macerich Company (Mac Free Report) rose 2.42% during yesterday’s regular trading session on the NYSE as this retail REIT generated better-than-expected adjusted operating funds (FFO) per share on the line of the solid top. The company experienced an increase in the occupancy rate.

During the second half of the year, there was an increase in customer traffic even amid rising COVID-19 case rates of the Delta and Omicron variants.

Macerich reported FFO per share of 53 cents, excluding Chandler Freehold financing charges, and a loss on debt extinguishment, which topped Zacks’ consensus estimate of 48 cents. Additionally, the figure compares favorably to the prior year’s quarter of 45 cents.

The company generated revenue of $229.4 million in the fourth quarter. Revenue topped Zacks’ consensus estimate of $219.9 million and grew 17.9% year-over-year.

Tenant sales and real estate traffic volumes have been robust over the holiday season. In the fourth quarter of 2021, same-tenant sales of the portfolio of space under 10,000 square feet were 12% higher than the pre-pandemic fourth quarter of 2019. During the holiday season, traffic was approximately 95 % of the 2019 pre-pandemic holiday period.

For 2021, Macerich reported FFO per share of $2.03, excluding Chandler Freehold financing costs, and loss on debt extinguishment, which topped Zacks’ consensus estimate of 1.97. $. However, the figure compares unfavorably to the figure of $2.16 a year ago. Revenue of $847.4 million jumped 7.8% year over year.

Behind the headlines

As of December 31, 2021, the portfolio’s occupancy rate was 91.5%, reflecting an expansion of 120 basis points compared to 90.3% as of September 30, 2021.

For the twelve months ended December 31, 2021, reletting variances from expiring base rent were +5%.

The net operating income or NOI of the same center (including lease termination income) increased by 36.1% compared to the figure for the quarter of the previous year.

As of December 31, 2021, it had cash and cash equivalents of $112.5 million. As of February 10, MAC had approximately $622 million in cash, including unrestricted cash, totaling over $190 million. The balance represented available capacity on its revolving line of credit.

The company has made progress toward deleveraging, with $1.7 billion of debt repaid in 2021. This marked a 20% reduction in its share of debt since December 31, 2020.

Advice

Macerich expects 2022 FFO per share in the range of $1.85 to $2.05. The Zacks consensus estimate for the same is currently pegged at $1.93.

Dividend Update

On January 27, Macerich announced a quarterly cash dividend of 15 cents per share. The dividend will be paid on March 3 to shareholders of record on February 18, 2022.

Currently, Macerich carries a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Retail REIT Performance

Simon Property Group, Inc.’s (GPS Free Report) in the fourth quarter of 2021, FFO per share of $3.09 exceeded the Zacks consensus estimate of $2.88. Simon Property’s performance was supported by occupancy and growth in the NOI. However, SPG generated revenue of $1.33 billion in the quarter, lagging Zacks’ consensus estimate of $1.35 billion.

Kimco Realty Corp.it is (Kim Free Report) in the fourth quarter of 2021, FFO NAREIT reached 39 cents per share, beating Zacks’ consensus estimate of 37 cents. This figure also compares favorably to the prior year quarter count of 31 cents. Kimco’s results reflect better than expected revenues. KIM also released its 2022 outlook.

To note: Everything related to earnings presented in this article represents funds from operations (FFO) – a metric widely used to assess the performance of REITs.

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