Health Care REIT Inc. Earnings Cheat Sheet: Double-Digit Growth

S&P 500 (NYSE:SPY) component Health Care REIT Inc. (NYSE:HCN) reported its results for the first quarter. Health Care REIT is a real estate investment trust that invests in and manages senior housing and health care real estate.

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Health Care REIT Earnings Cheat Sheet for the First Quarter

Results: The company’s funds from operations (FFO) rose 24.3% from the year-earlier quarter to 87 cents. FFO, a measure of performance of a real estate investment trust (REIT), removes the profit-reducing effect that depreciation has on earnings. It was in line with the consensus estimate. FFO, a measure of performance of a real estate investment trust (REIT), removes the profit-reducing effect that depreciation has on earnings.

Quoting Management:  “Our relationship investment strategy is working,” commented George L. Chapman, Chairman, Chief Executive Officer and President of Health Care REIT.  “We have completed $1.3 billion of investments year-to-date, including $753 million in the first quarter.  Nearly 90% of our first quarter investments were derived from existing relationships, with the remainder primarily representing a new investment with Senior Lifestyle Corporation, the 10th largest seniors housing operator in the country.  Our steady stream of investments over the past year generated excellent 24% FFO per share and 26% FAD per share growth.  Finally, our capital transactions lowered our blended cost of capital, reduced overall leverage, and provided significant liquidity to support our investment program throughout the remainder of 2012 as we continue to deliver strong total returns for our shareholders.”

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the second quarter is 90 cents per share, down from 94 cents ninety days ago. For the fiscal year, the average estimate has moved down from $3.78 a share to $3.65 over the last ninety days.

Competitors to Watch: HCP, Inc., Ventas, Inc., Omega Healthcare Investors, Inc., National Health Investors Inc, LTC Properties, Inc., Senior Housing Properties Trust, Healthcare Realty Trust Inc., Universal Health Realty Income Trust, Medical Properties Trust, Inc., and Nationwide Health Properties Inc.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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