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Welltower (HCN) Surpasses Q3 FFO and Revenues Estimates


Have you been eager to see how Welltower Inc. HCN performed in Q3 in comparison with the market expectations? Let’s quickly scan through the key facts from this Toledo, OH-based, healthcare real estate investment trust’s (REIT) earnings release this morning:

A FFO Beat

Welltower came out with normalized funds from operations (FFO) per share of $1.08, beating the Zacks Consensus Estimate of $1.05.

The company experienced solid seniors housing operating performance in the third quarter.

How Was the Earnings Surprise Trend?

Welltower has a decent earnings surprise history. Before posting a beat in Q3, the company delivered positive surprise in three out of prior four quarters and in-line results in the other occasion, as shown in the chart below.

Welltower Inc. Price and EPS Surprise

Overall, the company surpassed the Zacks Consensus Estimate by an average of 0.92% in the trailing four quarters.

Note: The EPS numbers presented in the above chart represent funds from operations (FFO) per share.

Revenue Came In Higher Than Expected

Welltower posted revenues of $1.09 billion, which beat the Zacks Consensus Estimate of $1.04 billion. It also compared favorably with the year-ago number of $1.07 billion.

Key Developments to Note

Welltower has updated its 2017 normalized FFO per share guidance and expects it to remain in the range of $4.19-$4.25.

Moreover, the company has increased total same store net operating income (SSNOI) guidance to 2.5-3% from the prior outlook of 2.25-3%, mainly due to the continued better-than-expected seniors housing operating performance.

Further, in sync with its strategic repositioning of its premier health care portfolio, the company anticipates 2017 disposition proceeds to be around $2.4 billion.

What Zacks Rank Says

Welltower has a Zacks Rank #3 (Hold). However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Check back later for our full write up on this HCN earnings report!

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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