Taubman Centers (TCO) Tops Q3 EPS by 66c

Taubman Centers (NYSE: TCO) reported Q3 EPS of $0.86, $0.66 better than the analyst estimate of $0.20. Revenue for the quarter came in at $216.87 million versus the consensus estimate of $163.97 million.

• Net Income and Earnings Per Diluted Common Share (EPS) Higher Due to Sale of Interest in Starfield Hanam
• Pro Rata Total Portfolio NOI, Excluding Lease Cancellation Income, Up 0.7 Percent for the Quarter and 3.6 Percent Year-to-Date
• Average Rent Per Square Foot Up 2.3 Percent
• Trailing 12-Month Tenant Sales Per Square Foot $868, Up 12 Percent
• Sales Per Square Foot Up 11.2 Percent, 13th Consecutive Quarter of Growth

“We were pleased to meet our earnings expectations this quarter,” said Robert S. Taubman, chairman, president and chief executive officer.

2019 Guidance

Taubman is updating certain key guidance measures for 2019.

EPS is now expected to be in the range of $4.00 to $4.15 per diluted share, revised from the previous range of $0.60 to $0.80 per diluted share, primarily due to gains recognized related to the Starfield Hanam transaction.

FFO is now expected to be in the range of $3.49 to $3.59 per diluted common share, revised from the previous range of $3.47 to $3.57 per diluted share.

Adjusted FFO guidance, which excludes $0.15 per diluted common share of year-to-date adjustments, remains unchanged and is expected to be in the range of $3.64 to $3.74 per diluted common share.

Comparable center NOI growth is now expected to be flat to 1 percent for the year, reduced from the previous guidance of about 2 percent. Lower NOI growth is expected primarily due to unfavorable foreign currency exchange rates (which have negatively impacted growth by 0.8 percent year-to-date) and elevated tenant bankruptcies, including Forever 21.

The company’s share of consolidated and unconsolidated interest expense is now expected to be $205 to $210 million, down from the previous range of $215 to $221 million. The company expects lower interest expense as a result of lower rates and a lower balance on its line of credit due to the paydown from the Starfield Hanam transaction proceeds.

The company’s share of lease cancellation income is now expected to be approximately $10 million, compared to our previous guidance of approximately $12 million.

All other key guidance measures remain unchanged. This guidance does not include the impact of the remaining Blackstone transactions. We anticipate these transactions will close around year-end 2019. The guidance also does not include an assumption for future costs associated with shareholder activism.

For earnings history and earnings-related data on Taubman Centers (TCO) click here.

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