Health Care REIT Q2 FFO Rises, Beats View; Lifts 2014 FFO Outlook

(RTTNews) - Health Care REIT, Inc. (HCN) on Friday reported an increase in funds from operations for the second quarter from last year as well as a turnaround to profit on higher revenues. Normalized FFO for the quarter beat analysts' expectations.

Looking ahead to fiscal 2014, the company raised its outlook for FFO, but lowered its net earnings guidance, citing CEO transition costs and transaction costs.

For the second quarter, funds from operations increased to $284.25 million or $0.95 per share from $230.67 million or $0.83 per share in the previous year.

Normalized FFO or FFO adjusted for certain items, were $1.06 per share, compared to $0.93 per share in the year-ago quarter. On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $1.02 per share for the quarter. Analysts' estimates typically exclude special items.

Funds available for distribution were $0.84 per share, up from $0.73 per share reported last year. Funds available for distribution - normalized were $0.94, compared to $0.82 per share a year ago.

The company attributed the higher earnings results to strong quarterly operating results as well as $2.7 billion of investments over the last twelve months.

Net income attributable to common stockholders for the quarter was $71.83 million or $0.24 per share, compared to net loss of $8.51 million or $0.03 per share in the same quarter last year.

Gross revenues for the quarter grew 22 percent to $826.45 million from $678.53 million in the prior year. Analysts had a consensus revenue estimate of $807.85 million for the quarter.

Rental income for the quarter increased 16 percent to $347.85 million, while resident fees and service revenue grew 26 percent to $467.64 million.

Meanwhile, total expenses advanced 16 percent from last year to $738.85 million.

Looking ahead to fiscal 2014, Health Care REIT increased its outlook, and now expects to generate normalized FFO in a range of $4.05 to $4.15 per share, compared to the previous range of $4.03 to $4.13 per share. The forecast now represents a 6 percent to 9 percent increase from 2013.

The company also increased its fiscal 2014 normalized FAD guidance to a range of $3.57 to $3.67 per share from the previous range of $3.55 to $3.65 per share, now representing a 6 percent to 9 percent increase from 2013.

However, the company lowered its forecast for full-year net income attributable to common stockholders to a range of $1.02 to $1.12 per share from the previous range of $1.04 to $1.14 per share, citing CEO transition costs and transaction costs.

Analysts expect the company to report earnings of $4.07 per share for the year.

HCN is trading at $64.21, up $0.58 or 0.91 percent on a volume of 119,882 shares.