Boston, MA 05/08/2014 (wallstreetpr) – Though Essex Property Trust Inc (NYSE:ESS) reported 1Q2014 results that fell short of Wall Street expectations, investor confidence in the stock soared, raising questions as to why? Typically, shares fall when companies report tepid results as was the case of Essex in the latest quarter. However, the company managed to win investor confidence with its encouraging guidance update for the current fiscal year.
Though results in the latest quarter seemed weaker than what the market expected, the company increased expectations for the current fiscal year. As such, the attention of the investors was diverted to what is coming ahead rather than the past that cannot be changed.
The company expects to report Core funds from operations (FFO) between $8.15 and $8.45 per share in fiscal 2014, thus, signaling significant improvement in the guidance considering that the company previously estimated FFO between $8.10 and $8.40 per share for the full-year. The current Wall Street estimate for fiscal 2014 FFO is $8.32 per share.
The strong estimate helped to dilute the impact that a weaker than expected 1Q FFO might have had on the stock.
1Q in summary
The $17 billion real estate investment trust reported FFO of $67.8 million, translating to $1.68 per share for 1Q2014. That was down from $77.4 million or $1.97 per share realized in the corresponding quarter a year earlier. Analysts on the average expected FFO of $2.01 per share.
Property acquisition and development
Essex Property Trust Inc (NYSE:ESS) keeps boosting its asset portfolio while also revamping existing facilities to attract high dollar tenants. Following the completion of the $11.1 billion purchase of BRE Properties, the company can be seen hitting the ground running to complete various pipeline projects.
It has about 15 high-dollar projects in the pipeline that include development of new properties and revamping of some. For example, Essex Property Trust Inc (NYSE:ESS) announced restarting work at its 172-unit property in Mission Bay that was impacted by fire in March. Essex Property Trust Inc (NYSE:ESS) also has various other projects that are intended for completion on the next few years to meet the high demand for real estate properties.
