Equity Residential (EQR) Misses Q4 EPS by 2c, Beats on Revenues; Offers FY18 EPS Guidance Above Consensus

Equity Residential (NYSE: EQR) reported Q4 EPS of $0.34, $0.02 worse than the analyst estimate of $0.36. Revenue for the quarter came in at $630.5 million versus the consensus estimate of $625.3 million.

FY18 Guidance

The Company has established an EPS guidance range of $1.71 to $1.81 for the full year 2018. The difference between the Company’s full year 2017 EPS of $1.63 and the midpoint of the full year 2018 guidance range of $1.76 is due primarily to higher expected gains on property sales, higher expected depreciation expense and the items described below.

The Company has established an FFO guidance range of $3.10 to $3.20 per share for the full year 2018. The midpoint of the full year 2018 FFO guidance range of $3.15 per share is identical to the Company’s full year 2017 FFO of $3.15 per share with variances in line items due primarily to higher expected debt extinguishment costs, lower expected gains on sales of non-operating assets and the items described below.

First Quarter 2018 Guidance

The Company has established an EPS guidance range of $0.48 to $0.52 for the first quarter of 2018. The difference between the Company’s fourth quarter 2017 EPS of $0.34 and the midpoint of the first quarter 2018 guidance range of $0.50 is due primarily to higher expected gains on property sales and the items described below.

The Company has established an FFO guidance range of $0.69 to $0.73 per share for the first quarter of 2018. The difference between the Company’s fourth quarter 2017 FFO of $0.82 per share and the midpoint of the first quarter 2018 guidance range of $0.71 per share is due primarily to higher expected debt extinguishment costs and the items described below.

The Company has established a Normalized FFO guidance range of $0.74 to $0.78 per share for the first quarter of 2018. The difference between the Company’s fourth quarter 2017 Normalized FFO of $0.83 per share and the midpoint of the first quarter 2018 guidancerange of $0.76 per share is due primarily to:

• A negative impact of approximately $0.04 per share from lower same store NOI;
• A negative impact of approximately $0.01 per share as a result of the Company’s 2017 and 2018 transaction activity; and
• A negative impact of approximately $0.02 per share from higher overhead costs (property management and general and administrative expenses), which are typically front-end loaded for the year.

GUIDANCE:

Equity Residential sees FY2018 EPS of $1.71-$1.81, versus the consensus of $1.37.

For earnings history and earnings-related data on Equity Residential (EQR) click here.

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