Sabra Health Care REIT (NASDAQ: SBRA) reported Q2 EPS of $1.08, versus $0.33 reported last year. Revenue for the quarter came in at $166.31 million versus the consensus estimate of $164.83 million.

Commenting on the second quarter results, Rick Matros, CEO and Chairman, said, “The results for the quarter were in line with our expectations. We expect that occupancy and coverages for our Skilled Nursing portfolio and the sector as a whole are close to bottom and that we will see an upturn in 2019, with Senior Housing lagging somewhat behind due to existing oversupply. Coverages for both Skilled Nursing and Senior Housing were down slightly sequentially, but, with the exception of Senior Care Centers, we are not aware of any trends among our operators that are concerning to us. Notably, Holiday recently terminated their lease agreements with New Senior, which helped improve their guarantor-level fixed charge coverage four basis points over last quarter, to 1.15x on a pro forma basis. Our Senior Housing - Leased occupancy was minimally down but healthy at 86.2%, while our Skilled Nursing occupancy ticked up slightly to 81.8%. Skilled Nursing occupancy for the first quarter of 2018 was slightly better than the fourth quarter of 2017, which supports our view regarding Skilled Nursing trends. The Enlivant portfolio continues to ramp up both in the owned and joint venture properties. We have seen a strong rebound in occupancy from the first quarter flu impact. June and July occupancy were the two best consecutive months that our Enlivant joint venture portfolio has experienced.

“As it pertains to the Senior Care Centers portfolio, we continue to be focused on a sales process with the intent to complete that process in 2018.

“CMS has issued their final rule and as expected, the October 1, 2018 market basket increase will be 2.4% with the implementation of PDPM scheduled for October 2019, both of which are good news for the Skilled Nursing sector.

“We affirm our previously issued 2018 guidance and will update the guidance as necessary once we have further clarity on Senior Care Centers and the timing of dispositions.”

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