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A month has gone by since the last earnings report for Essex Property Trust (ESS). Shares have added about 4.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Essex Property Trust due for a pullback? 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 drivers.
Essex Property Q4 FFO Beats Estimates, Revenues Increase Y/Y
Essex Property reported fourth-quarter 2024 core FFO per share of $3.92, which beat the Zacks Consensus Estimate of $3.90. The figure also improved 2.3% from the year-ago quarter.
Results reflected favorable growth in same-property revenues and NOI. Essex Property issued first-quarter and full-year 2025 guidance for core FFO per share.
Total revenues of $454.5 million outpaced the Zacks Consensus Estimate of $453.1 million. Revenues were up 7.8% year over year.
For full-year 2024, core FFO per share came in at $15.60, improving by 3.8% year over year. The reported figure beat the Zacks Consensus Estimate by two cents. This was backed by 6.3% growth in revenues to $1.77 billion.
Quarter in Detail
In the fourth quarter, Essex Property’s same-property revenues increased 2.6% from the prior-year period, below our estimate of 5.6%. The same-property operating expenses rose 4.7% year over year versus our estimate of 7.5%.
The same-property NOI increased 1.7% year over year, below our estimate of 4.8%. Financial occupancies of 95.9% in the fourth quarter fell 20 basis points (bps) year over year and 30 bps sequentially. The metric came below our estimate of 96.1%.
Portfolio Activity
In October, Essex Property acquired a 49.9% joint venture partner’s interest in the BEX II portfolio, with four communities consisting of 871 apartment units, for $337.5 million on a gross basis ($168.4 million at pro rata). In November, it acquired another community, Beaumont, with 344 apartment units in Woodinville, WA, for $136.1 million.
In October, the company disposed of its 81.5% interest in an apartment community in San Mateo, CA, for $252.4 million on a gross basis ($205.7 million at pro rata).
Balance Sheet
Essex Property had $1.3 billion in liquidity through the undrawn capacity on its unsecured credit facilities, cash and cash equivalents and marketable securities as of Dec. 31, 2024. Essex Property exited the fourth quarter of 2024 with cash and cash equivalents, including restricted cash, of $75.8 million, down from the $80.3 million recorded at the end of the prior quarter.