Health Care REIT Q4 Normalized FFO Tops Estimates - Update

(RTTNews) - Health Care REIT, Inc. (HCN) Wednesday reported a rise in funds from operations or FFO, for the fourth quarter, while net income fell sharply, reflecting higher expenses despite growth in revenues. Normalized FFO beat analysts' expectations.

For the fourth quarter, funds from operations increased to $265.08 million or $0.92 per share from $205.05 million or $0.78 per share in the previous year.

Normalized FFO or FFO adjusted for certain items, were $0.99, while the company posted $0.85 in the year-ago quarter. On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.97 per share for the quarter. Analysts' estimates typically exclude special items.

Funds available for distribution were $0.79 per share, compared to $0.73 per share reported last year. Funds available for distribution - normalized totaled $0.86, while it was $0.74 per share a year ago.

"The outstanding 16% increase in FFO and FAD this quarter demonstrates the power of our platform and its earnings potential," said George Chapman, chairman and CEO of the firm. The company considers FFO and Funds available for distribution or FAD to be useful supplemental measures of its operating performance.

However, net income attributable to common stockholders sharply declined to $11.47 million or $0.04 per share from $90.58 million or $0.35 per share in the same quarter last year.

Gross revenues for the quarter climbed to $788.58 million from $496.96 million in the prior year. Five analysts had consensus revenue estimate of $791.15 million for the quarter.

Rental income increased to $327.50 million from $282.06 million a year earlier. Resident fees and service revenue totaled $451.84 million, higher than $199.20 million last year.

Meanwhile, total expenses advanced to $750.15 million from $427.03 million in the previous year.

Looking ahead, for full-year 2014, the company expects net income attributable to common stockholders to be in the range of $1.09 to $1.19 per share.

Normalized funds from operations are expected to be in the range of $3.93 to $4.03 per share, and normalized FAD of $3.53 to $3.63 per share. Analysts project annual earnings per share of $3.99.

HCN closed Tuesday's regular trading at $56.96 on the NYSE.