Essex Property Trust Stock Fell despite Robust 3Q15 Earnings



Essex’s earnings review

The third largest US residential REIT, Essex Property Trust (ESS), reported its 3Q15 earnings on October 29. The company’s EPS (earnings per share) for 3Q15 was $0.65, much higher than the consensus estimate of $0.56. Core funds from operations (or FFO) per share for 3Q15 was $2.49, higher than the consensus estimate of $2.46. Essex Property Trust’s revenues of $304.6 million also beat the consensus estimate of $302.7 million. The company recorded a 15.5% growth in portfolio net operating income year-over-year to $208.4 million.

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Market reacts negatively

The market reacted negatively to Essex Property Trust’s 3Q15 earnings. Soon after the earnings release, the stock dipped by 3.6% over the previous day’s close to $218.08. Eventually, the stock closed at $220.44, declining 2.6% from the previous day’s closing.

Essex Property Trust (ESS) has experienced a decent stock performance lately. Year-to-date (or YTD), shares have risen 6.7%. Other major apartment REITs like AvalonBay Communities (AVB), Apartment Investment and Management Company (AIV), and UDR (UDR) have also performed well with YTD returns of 7%, 5.5%, and 11.8%, respectively. On the other hand, the broader SPDR DJ Wilshire REIT ETF (RWR) has risen by a mere 0.3% year-to-date.

Series overview

In this series, we’ll explore Essex Property Trust’s 3Q15 earnings in detail. We’ll discuss what factors could drive its earnings in the coming quarters. We’ll also cover the key points from the company’s 3Q15 earnings conference call.

In the next article, we’ll discuss Essex Property Trust’s revenue growth.


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