NEW YORK CITY—With W. P. Carey the latest to do so, net lease REITs reporting their fourth-quarter 2017 results have usually, although not invariably, surpassed estimates of various performance metrics. WPC's earnings per share of $1.18, announced Friday morning, beat the Zacks consensus estimate by 61 cents. Its adjusted funds from operations for Q4 and the past 12 months similarly represented gains compared to 2016.
“Our fourth-quarter and full-year results reflect the continuing positive effects of the advancements we've made in recent years, with AFFO per diluted share up 7.4% and 3.5%, respectively, over the prior-year periods,” says CEO Jason Fox. “Reductions in our cost base and an improved cost of debt outweighed the near-term impacts of our decisions to be a net seller and refocus our business, which have improved the quality of our portfolio and the composition of our revenue streams.” This past June, WPC's board voted to wind down the company's non-traded REIT series.
On Thursday, VEREIT reported Q4 revenues of $290.56 million, beating consensus estimates of $282.34 million. During Thursday's earnings call, CEO Glenn Rufrano, who joined in April 2015 to turn around the REIT's fortunes after accounting irregularities led to the resignations of senior management in late 2014, said that he'd be staying on for another three years.
STORE Capital, also reporting on Thursday, topped the Zacks consensus for EPS by two cents, coming in at 43 cents/share. Although Q4 FFO of 40 cents per share missed the consensus by a penny, the REIT's shares were up by 3% following its earnings announcement, Seeking Alpha reported Thursday.
Agree Realty's Q4 net income had been estimated at around 40 cents per share by analysts , but in fact the REIT reported net income of 55 cents per share, a 10.6% increase from the year-ago period. Its FFO and AFFO were up by 10.9% and 11.4%, respectively.
Spirit Realty Corp. missed Zacks estimates on one metric and beat them on another. Its Q4 FFO was reported as 21 cents per share, a penny below the 22-cent estimate. However, its quarterly revenue of $165.3 million came in ahead of the $163.7-million consensus.
National Retail Properties, which reported earlier this month, similarly posted mixed quarterly results. EPS of 63 cents missed the Zacks estimate by one cent, although it was up 6.4% from Q4 '16. Revenues beat estimates at $150.2 million.
The sector's most notable shortfall was in Realty Income's Q4 FFO. At 61 cents per share, the sector's biggest REIT by market capitalization missed Q4 estimates by four cents per share, although its AFFO for Q4 and FY '17, occupancy rates and rents all posted year-over-year gains.
Yet to report its Q4 and FY '17 results is Gramercy Property Trust, scheduled to do so after the market closes on Feb. 28. The Zacks consensus estimate on GPT's Q4 EPS is 52 cents per share.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
