Equity Residential (EQR) reported funds from operations (FFO) of $180.7 million in second quarter 2011 compared with $175.1 million in the year-ago quarter. FFO per share in the reported quarter remained flat year over year at 58 cents. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Excluding one-time items, FFO in the second quarter stood at $186.7 million or 60 cents per share compared with $175.2 million or 58 cents per share in the year- ago quarter. Reported FFO was in line with the Zacks Consensus Estimate.
Total revenues during the quarter were $498.1 million compared with $447.4 million in the year-earlier period.
Same-store (which includes 105,730 apartment units) quarterly revenues increased 4.9%. Same-store net operating income (NOI) during the quarter increased 7.4% year over year.
During the quarter, Equity Residential acquired five properties totaling 1,548 apartment units for $410.2 million, at a weighted average cap rate of 5.0%. The company also bought a land parcel for further development for $12.9 million in Washington, D.C. Equity Residential sold 26 consolidated properties during the second quarter of 2011 (8536 apartment units) for $911.5 million, at a weighted average cap rate of 6.3%.
Equity Residential did not issue any shares under the share offering program and currently has 10 million shares available for future issuance. At quarter end, the company had cash and cash equivalents of $604.8 million.
For third quarter 2011, recurring FFO is expected in the range of 59 cents to 63 cents per share. For full-year 2011, Equity Residential expects recurring FFO in the range of $2.40 to $2.50 per share.
Equity Residential currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Apartment Investment & Management Co. (AIV) also holds a Zacks #3 Rank.
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