Ventas (VTR) FFO and Revenue Exceed Estimates in Q4

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Ventas, Inc. VTR announced funds from normalized operations (FFO) per share for the fourth quarter of 2021 of 73 cents, beating Zacks’ consensus estimate of 71 cents. However, the figure was down 12% from the year-ago quarter reading.

VTR generated revenue of $1.02 billion in the fourth quarter, which exceeded Zacks’ consensus estimate of $972.6 million. Revenue increased 11% year over year.

Quarterly results reflect improved occupancy in the Senior Housing Operating Portfolio (SHOP) segment.

For 2021, Ventas reported normalized FFO per share of $2.90, down 12.7% from $3.32 a year earlier. The reported figure, however, exceeded Zacks’ consensus estimate of $2.87. Total revenue of $3.82 billion improved slightly year over year.

Quarter in detail

For the fourth quarter, same-store cash NOI growth for the entire real estate portfolio (1,135 assets) increased 0.2%, sequentially. From a segment perspective, same store cash ETB for the office portfolio decreased 0.1% from the prior quarter level. While the same store cash NOI for the Triple Net Leased (NNN) portfolio was flat, it increased 0.5% for the SHOP portfolio, on a sequential basis.

Average comparable store occupancy in the SHOP portfolio increased by 200 basis points to 83.4% in the fourth quarter of 2021 compared to the level of the fourth quarter of 2020.

Balance sheet position

Ventas ended the fourth quarter of 2021 with cash and cash equivalents of $149.7 million, up 4.1% from the $143.8 million recorded at the end of the third quarter. For the December quarter, the net debt to adjusted pro forma EBITDA ratio was 7.2X, in line with the September quarter level.

VTR had $2.5 billion in cash at year end.

Outlook

Ventas expects Q1 2022 normalized FFO per share to be between 76 and 80 cents. Zacks consensus estimate for the same is pegged at 69 cents.

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

Ventas, Inc. Price, Consensus and EPS Surprise

Ventas, Inc. price-consensus-eps-surprise-chart | Quote from Ventas, Inc.

Performance of other REITs

Alexandria Real Estate Equities, Inc. ARE reported adjusted FFO of $1.97 per share for the fourth quarter of 2021, up 7.1% from $1.84 in the prior year quarter. The figure topped Zacks’ consensus estimate of $1.96.

ARE’s year-over-year improvement in FFO was led by revenue growth of 24.4% to $576.9 million. The results reflect decent organic growth. Alexandria saw healthy and steady rental activity and growth in rental rates during the quarter.

Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported Q4 2021 basic FFO per share of $1.90, beating Zacks’ consensus estimate of $1.87. The reported number was up 15.2% from the figure of $1.57 a year ago.

MAA’s quarterly results were boosted by an increase in the average effective rent per unit for the comparable store portfolio. The average physical occupancy rate of the comparable store portfolio also increased year-on-year.

Residential EquityEQR Q4 2021 normalized FFO per share of 82 cents beat Zacks’ consensus estimate of 80 cents. Rental revenue of $645.1 million also beat the consensus mark of $628.6 million.

On an annual basis, Equity Residential’s normalized FFO per share improved by 7.9%, while rental income increased by 5.2%. EQR’s results were driven by high physical occupancy, significantly improved pricing power and higher non-residential income.

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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