Welltower (WELL) Tops Q1 EPS by 4c, Revenues Beat; Lowers EPS Guidance

Welltower (NYSE: WELL) reported Q1 EPS of $0.71, $0.04 better than the analyst estimate of $0.67. Revenue for the quarter came in at $1.27 billion versus the consensus estimate of $1.23 billion.

• Reported net income attributable to common stockholders of $0.71 per diluted share and normalized FFO attributable to common stockholders of $1.02 per diluted share compared to $0.99 per diluted share in 2018, representing 3% normalized FFO growth
• Total portfolio SSNOI grew 3.1%, driven by Seniors Housing Operating SSNOI growth of 3.0%
• Completed $259 million of pro rata acquisitions in high quality real estate with an additional $519 million in pro rata acquisitions subsequent to quarter end for a total blended yield of 5.9% across eight separate transactions
• Improved net debt to Adjusted EBITDA to 5.47x at March 31, 2019 from 5.84x at December 31, 2018
• Generated $538 million of gross proceeds from common stock issuances at an average price of $74.69 per share

"I'm pleased to report that our normalized FFO per diluted share grew by 3% over the first quarter of 2018, which is in-line with our expectations that we discussed at our December Investor Day," commented CEO, Tom DeRosa. "This earnings growth is being driven by improved performance across our business units. We continue to execute on our strategy of sourcing unique, accretive investment opportunities from our platform of seniors housing operators and new relationships with large, not-for-profit health systems. Our ESG initiatives have placed us at the very top of large S&P companies for workforce diversity, Board diversity and sustainability. In the first quarter, we were proud to be named to the Bloomberg Gender-Equality Index and recognized as an ENERGY STAR Partner of the Year. We see these initiatives as critical components of driving our sector-leading performance."

GUIDANCE:

Welltower sees FY2019 EPS of $2.62-$2.77, versus the consensus of $2.62.

Outlook for 2019 Net income attributable to common stockholders guidance has been revised to a range of $2.62 to $2.77 per diluted share from the previous range of $2.70 to $2.85 per diluted share, primarily due to changes in projected net gains/losses/impairments and depreciation and amortization. We are affirming our previously announced 2019 normalized FFO attributable to common stockholders guidance to $4.10 to $4.25 per diluted share. In preparing our guidance, we have updated or confirmed the following assumptions:

• Same Store NOI: We continue to expect average blended SSNOI growth of approximately 1.25%-2.25% in 2019.
  • Seniors Housing Operating approximately 0.5%-2.0%
  • Seniors Housing Triple-net approximately 3.0%-3.5%
  • Outpatient Medical approximately 1.75%-2.25%
  • Health System 1.375%
  • Long-term/Post-acute Care approximately 2.0%-2.5%
• General and administrative expenses: We anticipate annual general and administrative expenses of approximately $130 million to $135 million, including $26 million of stock-based compensation.
• Acquisitions: 2019 earnings guidance includes any acquisitions closed or announced year to date.
• Development: We anticipate funding development of approximately $356 million in 2019 relating to projects underway on March 31, 2019.
• Dispositions: We anticipate disposition proceeds of approximately $1.4 billion at a blended yield of 6.2% in 2019.

For earnings history and earnings-related data on Welltower (WELL) click here.

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