UPDATE: Easterly Government Properties (DEA) Misses Q4 EPS by 5c, Revenues Beat; Offers FY19 EPS Guidance Below Consensus
Easterly Government Properties (NYSE: DEA) reported Q4 EPS of $0.01, $0.05 worse than the analyst estimate of $0.06. Revenue for the quarter came in at $48.21 million versus the consensus estimate of $46.72 million.
- Net income of $0.6 million, or $0.01 per share on a fully diluted basis
- FFO of $21.7 million, or $0.31 per share on a fully diluted basis
- FFO, as Adjusted of $20.1 million, or $0.29 per share on a fully diluted basis
- CAD of $17.3 million
- Completed the acquisition of three of the remaining six properties in the Company’s previously announced 14-property portfolio acquisition, representing an aggregate of 90,688 square feet, for a combined purchase price of approximately $33 million
- Completed the acquisition of the 83,676-square foot Department of the Treasury facility in Birmingham, Alabama (“TREAS - Birmingham”)
- Completed the acquisition of the 50,978-square foot Drug Enforcement Administration (DEA) laboratory located in Upper Marlboro, Maryland (“DEA - Upper Marlboro”)
- Lease commenced at the newly re-developed 210,373-square foot Federal Emergency Management Agency (FEMA) facility located in Tracy, California (“FEMA - Tracy”).
- Portfolio occupancy at 100%
- Amended the Company’s 2016 term loan facility to reduce the interest rate margin applicable to borrowings under the facility and extend the maturity date by six months to March 29, 2024
“In 2018 we saw the acquisition of the Company’s largest portfolio to date. This and other accretive acquisitions scaled the Company and contributed to the stated goal of generating long-term distributable cash flow growth backed by the full faith and credit of the U.S. Government,” said William C. Trimble, III, Easterly’s Chief Executive Officer. “We welcomed important new agencies into our growing portfolio while also delivering our first development project since IPO. The pipeline remains robust as we continue to execute on our bullseye acquisition and development strategies.”
GUIDANCE:
Easterly Government Properties sees FY2019 EPS of $0.06-$0.10, versus the consensus of $0.21.
The Company is reiterating its guidance for 2019 FFO per share on a fully diluted basis in a range of $1.16 - $1.20.
This guidance assumes $200 million of acquisitions, not including the Q1 2019 closings of the final three properties in the 14-property portfolio, and $75 - $100 million of gross development-related investment during 2019. Additionally, this guidance includes two factors which, in combination, diminish the Company’s expected results, relative to the Company’s 2018 performance, by approximately $0.045 per share on a fully diluted basis. First, positive non-cash adjustments to rental income from the amortization of above and below market leases, are expected to decline by approximately $2.5 million in 2019. Second, the Company’s weighted average shares on a fully diluted basis in 2019 will include approximately 1 million units that are the result of long-term incentive plan grants that were made at the time of IPO. Pro forma for these two factors, the midpoint of the Company’s 2019 guidance represents year-over-year FFO per share on a fully diluted basis growth of approximately 4.5%.
The Company’s guidance for 2019 FFO per share on a fully diluted basis represents expected FFO, as Adjusted per share on a fully diluted basis growth of approximately 6% to 11%. This is due, in part, to an anticipated year-over-year change in straight-line rent and above and below market lease amortization adjustments of approximately $4.5 million.
For earnings history and earnings-related data on Easterly Government Properties (DEA) click here.