PREIT (PEI) Tops Q2 EPS by 45c, Beats on Revenues

PREIT (NYSE: PEI) reported Q2 EPS of $0.39, $0.45 better than the analyst estimate of ($0.06). Revenue for the quarter came in at $89.25 million versus the consensus estimate of $58.5 million.

2017 Outlook

The Company is revising its February 23, 2017 FFO guidance to give effect to employee separation expenses incurred in the second quarter of 2017 and narrowing the range, introducing guidance for FFO as adjusted to give effect to these factors and revising its estimate of GAAP earnings to give effect to asset impairment charges recorded in the second quarter of 2017, among other factors. FFO for the year ended December 31, 2017 is expected to be between $1.64 and $1.70 per diluted share; FFO as adjusted is expected to be between $1.66 and $1.72, while net loss is expected to be between $(0.89) and ($0.80). A reconciliation between GAAP net loss and FFO is as follows:

The guidance set forth above, does not give effect to the anticipated sales of Logan Valley Mall and an office condominium at Fashion Outlets of Philadelphia. Assuming that such sales close before the end of the third quarter, FFO and FFO as adjusted would be reduced by $0.04 per diluted share and net loss attributable to PREIT common shareholders would be increased by $0.04 per diluted share, including an estimated gain on sale of $0.06. Such gain would be excluded from FFO and FFO, as adjusted.

• Same Store NOI increased by 1.6% for wholly owned properties and 0.3% for the entire portfolio, including joint venture properties, compared to prior year and in line with management expectations.
• Same Store NOI for the quarter was impacted by $1.6 million as a result of bankruptcies and $0.3 million as a result of co-tenancy claims.
• Sales per square foot reached $468, a 2.2% increase over the prior year.
• Non-anchor leased space for malls was 91.9%, 190 basis points over quarter end physical occupancy.
• Average renewal spreads for tenants under 10,000 square feet were 3.7% for the quarter and are 4.9% year-to-date through June 30, 2017.
• Leases executed for future occupancy exceed 1 million square feet, more than double the pipeline of executed transactions as of June 30, 2016.
• Bank Leverage as of June 30, 2017 was 49.1%
• Agreements of sale were executed for Logan Valley Mall, our interest in 801 Market office condominium and a land parcel at Exton Square.
• Key anchor leases signed or opening: DICK's Sporting Goods at Capital City, DICK\'s Sporting Goods, Field & Stream and HomeGoods at Viewmont and Burlington at Magnolia will all be opening this quarter; Belk at Valley Mall signed for 2018 opening.

For earnings history and earnings-related data on PREIT (PEI) click here.

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