It has been about a month since the last earnings report for Taubman Centers, Inc. TCO. Shares have lost about 6.5% 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.
Taubman Centers Q4 FFO Lags Estimates, Revenues Up
Taubman Centers fourth-quarter 2016 adjusted FFO per share of $1.01 missed the Zacks Consensus Estimate of $1.03.
The company experienced a decline in lease and occupancy as well as comparable center net operating income (excluding lease cancellation income) in the quarter under review.
However, the results compared favorably with the year-ago quarter tally of $0.98, depicting growth of 3.1%.
Revenues came in at $166.2 million, beating the Zacks Consensus Estimate of $160.3 million and improving 6.4% from around $156.2 million in the prior-year quarter.
For full-year 2016, Taubman’s adjusted FFO per share were $3.58, reflecting growth of 4.7% from the year-ago figure of $3.42. Revenues of $612.6 million also grew 9.9% year over year.
Quarter in Detail
Comparable center NOI, excluding lease cancellation income, edged down 0.1% year over year; while average rent per square foot was $60.97, up 2% from year over year. For the period ended Dec 31, 2016, the trailing 12-month releasing spreads per square foot were 18.8%.
For the fourth quarter, mall tenant sales per square foot were up 5%. Further, comparable mall tenant sales per square foot of $792 for 2016 denoted growth of about 1% and reflected solid growth in the fourth quarter.
However, as of Dec 31, 2016, the comparable centers’ portfolio was 96.1% leased, denoting a 0.8% decline from 96.9% on Dec 31, 2015. Further, ending occupancy in comparable centers was 94.7% on Dec 31, 2016, reflecting a decline of 0.5% from 95.2% on Dec 31, 2015. Notably, the closing of three Sports Authority spaces, which aggregated 130,000 square feet and denoted around 1.3% of comparable center space, adversely affected the leasing and occupancy figures.
Liquidity
Taubman Centers exited fourth-quarter 2016 with cash and cash equivalents of $40.6 million, down from $206.6 million recorded at year-end 2015.
Guidance
Taubman Centers introduced its guidance for 2017. The company projects 2017 FFO per share in the range of $3.67–$3.82. The full-year FFO per share guidance is backed by assumptions of comparable center NOI growth, excluding lease cancellation income, of about 3.5% for the year.