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Digital Realty Reports Mixed Quarterly Results for 3Q15

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Oct. 30 2015, Published 9:04 a.m. ET

Price movement of Digital Realty

Digital Realty (DLR) has a market cap of $9.8 billion. Digital Realty’s stock has had its ups and downs in 2015. After the 3Q15 earnings report, DLR fell by 0.94% to close at $71.85 per share on October 29, 2015. The company’s income fell 58.1% in 3Q15 as compared to income in 2Q15. Its price movements on weekly, monthly, and YTD bases are -1.5%, 10.0%, and 12.8%, respectively.

Technically, DLR has broken the support of 20-day, 50-day, and 200-day moving averages throughout 2015. Currently, it’s trading 2.3% above its 20-day moving average, 8.9% above its 50-day moving average, and 9.8% above its 200-day moving average.

The iShares Cohen & Steers Realty Majors ETF (ICF) invests 2.4% of its holdings in Digital Realty. The ETF tracks an index of 30 large-cap REITs. ICF’s YTD price movement was 4.1% as of October 28, 2015. The Schwab US REIT ETF (SCHH) invests 1.6% of its holdings in Digital Realty.

Below are Digital Realty’s (DLR) competitors and their market caps:

  • CenturyLink (CTL)—$15.8 billion
  • Brandywine Realty Trust (BDN)—$2.5 billion
  • DuPont Fabros Technology (DFT)—$2.5 billion
  • CoreSite Realty Corporation (COR)—$2.6 billion
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Performance of Digital Realty in 3Q15

The company reported 3Q15 net revenue of $435,989 million, an increase of 3.7% when compared to the net revenue of $420,295 million in 2Q15. Revenue from rental and tenant reimbursements increased by 2.3% and 12.6% in 3Q15. Net income and EPS (earnings per share) fell to $57,842 million and $0.28, respectively, in 3Q15, as compared to net income and EPS of $137,997 million and $0.86, respectively, in 2Q15. Net investment in properties and net investment in real estate decreased by 0.84% and 0.82%, respectively, in 3Q15. The company’s debt-to-equity ratio decreased to 1.4 in 3Q15 as compared to the debt-to-equity ratio of 1.5 in 2Q15.

Key activities of Digital Reality in 3Q15

  • The company entered into an agreement to acquire Telx from private equity firms ABRY Partners and Berkshire Partners in a transaction valued at $1.9 billion. This acquisition was completed on October 12, 2015.
  • The company appointed Chris Sharp as chief technology officer (responsible for technology innovation and expansion of the service portfolio to support key industry trends) and Philip Lin as senior vice president, strategy (responsible for global market strategic roadmap).
  • Digital Realty and GMEX Technologies established multiple global hubs for new product exchanges and trading venues in Digital Realty’s facilities.
  • ClearSky Data announced an ecosystem partnership with Digital Realty to improve enterprise connectivity and storage infrastructure for users worldwide.

The company has declared dividends on common and preferred stocks:

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  • a cash dividend of $0.85 per share on its common stock
  • a cash dividend of $0.43750 per share on its 7.000% Series E Cumulative Redeemable Preferred Stock
  • a cash dividend of $0.414063 per share on its 6.625% Series F Cumulative Redeemable Preferred Stock
  • a cash dividend of $0.367188 per share on its 5.875% Series G Cumulative Redeemable Preferred Stock
  • a cash dividend of $0.460938 per share on its 7.375% Series H Cumulative Redeemable Preferred Stock

About Digital Realty

Digital Realty builds the global standard for technical real estate and develops a capability to acquire, manage, and scale data center campuses. It provides the combination of a data center ecosystem business with a colocation services provider in an interconnected global network.

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