STORE Capital (STOR) Tops Q2 EPS by 9c, Revenues Beat; Offers FY18 Guidance

STORE Capital (NYSE: STOR) reported Q2 EPS of $0.31, $0.09 better than the analyst estimate of $0.22. Revenue for the quarter came in at $131.2 million versus the consensus estimate of $125.47 million.

Highlights

For the quarter ended June 30, 2018:

• Total revenues of $131.2 million
• Net income of $62.2 million, or $0.31 per basic and diluted share, including an aggregate net gain of $19.9 million on dispositions of real estate
• AFFO of $91.1 million, or $0.46 per basic share and $0.45 per diluted share
• Declared a regular quarterly cash dividend per common share of $0.31
• Invested $335.1 million in 111 properties at a weighted average initial cap rate of 8.0%
• Raised net proceeds of $187.3 million from the sale of an aggregate of approximately 7.1 million common shares under the Company’s at-the-market equity program

Management Commentary

“This year marks our fourth consecutive year of realizing investment activity in excess of $100 million monthly for the first half of the year,” said Christopher Volk, Chief Executive Officer. “But what sets this quarter apart is our record investment granularity. Our expanded business development efforts are evident, with more than fifty transactions averaging just $6.5 million each. This work is foundational to our future growth, sustained high level of investment diversity, and the delivery of superior property-level investment returns. We concluded the quarter with solid portfolio performance, a balance sheet positioned for sustained growth and a more protected shareholder dividend, all of which are exciting as we look forward to fulfilling our potential for the second half of the year.”

2018 Guidance

Affirming its 2018 guidance initially presented in November 2017, the Company currently expects 2018 AFFO per share to be within a range of $1.78 to $1.84, based on projected 2018 annual real estate acquisition volume, net of projected property sales, of approximately $900 million. This AFFO per share guidance equates to anticipated net income, excluding gains or losses on sales of property, of $0.83 to $0.88 per share, plus $0.88 to $0.89 per share of expected real estate depreciation and amortization, plus approximately $0.07 per share related to such items as straight-line rent and the amortization of stock-based compensation and deferred financing costs. AFFO per share is sensitive to the timing and amount of real estate acquisitions, property dispositions and capital markets activities during the year, as well as to the spread achieved between the lease rates on new acquisitions and the interest rates on borrowings used to finance those acquisitions. The midpoint of our AFFO guidance is based on a weighted average cap rate on new acquisitions of 7.75% and target leverage in the range of 5½ to 6 times run-rate net debt to EBITDA.

For earnings history and earnings-related data on STORE Capital (STOR) click here.

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