Equity Residential’s earnings review
Equity Residential (EQR) is the largest US residential REIT. It reported its 3Q15 earnings on October 26. The company’s EPS (earnings per share) was $0.53 for 3Q15. It was much higher than the consensus estimate of $0.40. The FFO (funds from operations) per share for 3Q15 was $0.89—slightly higher than the consensus estimate of $0.88. Equity Residential’s revenue of $696.3 million also beat the consensus estimate of $690.7 million. The company recorded 6.7% growth in the same-store net operating income YoY (year-over-year) to $445.1 million.
Market reacts positively
The markets reacted positively to Equity Residential’s 3Q15 earnings and its plan to sell apartments to Starwood Capital. Soon after the earnings release, the stock opened at $81.33. It rose by 2.5% over the previous day’s close. Eventually, the stock closed at $80.94. It rose 1.8% from the previous day’s close.
Lately, Equity Residential experienced strong stock performance. YTD (year-to-date), the shares rose 12.7%. During the last month, the stock rose 11.1%. Other major apartment REITs like AvalonBay Communities (AVB), Essex Property Trust (ESS), and UDR (UDR) also performed well. They had YTD returns of 11.4%, 11.2%, and 9.2%, respectively. On the other hand, the broader SPDR DJ Wilshire REIT ETF (RWR) rose by a mere 1.2% YTD.
In this series, we’ll explore Equity Residential’s 3Q15 earnings in detail. We’ll discuss the factors that could drive its earnings in the coming quarters. We’ll also cover the key points from the company’s 3Q15 earnings conference call.