It has been about a month since the last earnings report for Apartment Investment and Management Company AIV. Shares have lost about 2.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Aimco Q1 FFO in Line with Estimates, Revenues Beat
Aimco reported first-quarter 2017 pro forma FFO of $0.58 per share, in line with the Zacks Consensus Estimate. The figure also came 2% higher than the year-ago tally of $0.57.
Results display growth in same-store property net operating income (NOI) and increased contribution from development, redevelopment and acquisition communities. However, the positive was partly offset by the loss of income from apartment sales in 2016.
Total revenue of $246.5 million exceeded the Zacks Consensus Estimate of $244.7 million. The reported figure also came higher than the prior-year quarter tally of $246.2 million.
Quarter in Detail
Same-store revenues increased 3.4% year over year to $161.2 million, while expenses rose 2.7% year over year to $48.4 million. Consequently, same-store net operating income (NOI) climbed 3.7% to $112.8 million on a year-over-year basis.
However, same-store average daily occupancy contracted 30 basis points (bps) year over year to 95.8%. Rental rates on new leases were down 1%, but on renewals were up 5.1% from the expiring lease rates.
As of Mar 31, 2017, Aimco held cash and restricted cash on hand of $88 million. Moreover, the estimated fair market value of the company’s unencumbered apartment communities came in at $1.6 billion.
Further, at the end of the quarter, Aimco’s outstanding borrowings on its revolving credit facility were $70 million and available capacity was $519 million, after considering $11 million of letters of credit backed by the facility.
Portfolio Activity
During the quarter, Aimco invested $41 million in redevelopment and development.
Moreover, as intended, Aimco continues to sell up to 10% of its lowest-rated portfolio each year, and uses the proceeds for acquisition and redevelopment of higher-quality apartments.
Through these measures, the company increased its revenue per apartment home by 7% to $1,996. The company has enhanced the quality and expected growth rate of its portfolio. Specifically, the percentage of A, B and C+ home was 51%, 35% and 14% in first-quarter 2017 compared with 48%, 35% and 17% , respectively in the year-ago quarter.
Guidance
For second-quarter 2017, Aimco provided pro forma FFO per share guidance in the band of $0.56–$0.60.