Ventas' Third Quarter Earnings Report

By Investopedia Staff | October 26, 2012 AAA

Ventas (NYSE:VTR) announced its results for the most recent quarter on October 26, 2012. Ventas is a real estate investment trust, with a portfolio of seniors housing and healthcare properties.

Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: Surprising Earnings Results

The Numbers: Ventas managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported adjusted net income of 96 cents per share versus the 94 cents per share estimate and revenues of $642 million versus the $591.9 million estimate. Revenue climbed 15.6% from the same period last year. The company's net income for the quarter was $111.9 million. This is 8.7% higher than the year-ago quarter. Last quarter marked the third in a row of rising net income.

Management Quote: "Ventas is thriving because of our diversified, high performing portfolio and disciplined execution of our investment and asset management strategy," Ventas Chairman and Chief Executive Officer Debra A. Cafaro said. "We achieved another quarter of outstanding results and have completed $1.7 billion in investments year to date. Our powerful business model and focused management team continue to deliver consistent strong growth in FFO and cash flow with a strong financial profile and well covered dividend. We are pleased to increase our full year earnings outlook."

A Look Back: Net income has increased more than twofold year-over-year on average across the last five quarters. The biggest gain came in the second, when income climbed more than threefold from the year-earlier quarter.

Looking Ahead: Over the past 90 days, the average estimate for the fourth quarter has fallen from 96 cents per share to 95 cents, indicating that analysts are growing pessisimistic about the company's performance next quarter. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved down from $3.73 a share to $3.72 over the last 90 days.

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