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Earnings Preview: Liberty Property - Analyst Blog
Liberty Property Trust (LRY), a real estate investment trust (REIT), is scheduled to report second quarter 2012 earnings results on July 24. The current Zacks Consensus Estimate of 63 cents for the quarter represents a year-over-year decline of 3.22%. First Quarter Recap
Liberty Property reported first quarter 2012 FFO (funds from operations) of 68 cents per share compared with 65 cents per share in the year-earlier quarter. Reported FFO beat the Zacks Consensus Estimate by $0.05. Funds from operations, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.
Total revenue for first quarter 2012 stood at $169.9 million compared with $166.1 million in the year-ago quarter. Total revenue in the reported quarter fell short of the Zacks Consensus Estimate of $173 million.
Agreement of Analysts
In the last 7 days, none of the analysts have revised their earningsestimate for 2012 and 2013. This signifies that the analysts are cautious about both the short- and long-term earnings prospect of the company.
Magnitude of Estimate Revisions
For full-year 2012, the company expects adjusted FFO in the range of $2.45 to $2.60 per share. The Zacks Consensus Estimates for 2012 have remained constant over the last 7 days at $2.59 per share, which is at the higher end of the company's guidance. For 2013, the Zacks Consensus Estimates have also remained flat over the last 7 days at $2.68 per share.
Our Recommendation
Based in Pennsylvania, Liberty Property provides leasing, property management, development, construction management, design management, and related services for a portfolio of industrial and office properties.
Liberty Property's assets are located in prime business locations and are designed to accommodate various types of tenants and space requirements. Liberty Property specifically focuses on metro-office, multi-tenant industrial and flex properties and markets that have strong demographic and economic fundamentals, which ensure a steady revenue stream for the company.
The company maintains a conservative balance sheet and offers a steady dividend payout to the shareholders, which augur well for the long-term growth of the company.
However, the acquisition spree of Liberty Propertyinvolves significant upfront operating expenses with limited near-term profitability. New properties usually take time to generate revenues, and will continue to drag down margins till they get established.
Liberty Property currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Duke Realty Corp. (DRE) carries a Zacks #3 Rank, which translates into a short-term Hold rating.
Liberty Property reported first quarter 2012 FFO (funds from operations) of 68 cents per share compared with 65 cents per share in the year-earlier quarter. Reported FFO beat the Zacks Consensus Estimate by $0.05. Funds from operations, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.
Total revenue for first quarter 2012 stood at $169.9 million compared with $166.1 million in the year-ago quarter. Total revenue in the reported quarter fell short of the Zacks Consensus Estimate of $173 million.
Agreement of Analysts
In the last 7 days, none of the analysts have revised their earningsestimate for 2012 and 2013. This signifies that the analysts are cautious about both the short- and long-term earnings prospect of the company.
Magnitude of Estimate Revisions
Our Recommendation
Based in Pennsylvania, Liberty Property provides leasing, property management, development, construction management, design management, and related services for a portfolio of industrial and office properties.
Liberty Property's assets are located in prime business locations and are designed to accommodate various types of tenants and space requirements. Liberty Property specifically focuses on metro-office, multi-tenant industrial and flex properties and markets that have strong demographic and economic fundamentals, which ensure a steady revenue stream for the company.
The company maintains a conservative balance sheet and offers a steady dividend payout to the shareholders, which augur well for the long-term growth of the company.
However, the acquisition spree of Liberty Propertyinvolves significant upfront operating expenses with limited near-term profitability. New properties usually take time to generate revenues, and will continue to drag down margins till they get established.
Liberty Property currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Duke Realty Corp. (DRE) carries a Zacks #3 Rank, which translates into a short-term Hold rating.
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