The second-largest US retail REIT (real estate investment trust), General Growth Properties (GGP) reported its 3Q15 earnings on November 2, 2015. The company’s EPS (earnings per share) increased by a whopping 85.7% in 3Q15 to $0.13—0.73% higher than the consensus estimate. The company’s FFO (funds from operations) per share for 3Q15 was $0.36, which was higher than the consensus estimate of $0.354.
General Growth Properties revenues of $768 million in 3Q15 were also higher than the consensus estimate of $763.5 million. The company recorded a 5.1% jump in comparable net operating income YoY (year-over-year) to $560 million.
Positive market reaction
Markets gave a thumbs up to General Growth Properties after it released its 3Q15 earnings report. The company’s stock price gained by 1.15% soon after the release, closing at $29.55 and showing a 2.1% gain from the previous day’s close.
The company’s shares have gained only 2% YTD (year-to-date). However, General Growth Properties has experienced a strong stock performance in the second half of 2015. As the above graph shows, during the previous month, the company’s stock gained by 8.5%.
Other major retail REITs like Macerich Company (MAC) and Taubman Centers (TCO) also experienced lackluster performance, with YTD returns of 2.4% and 0.1%, respectively. On the other hand, CBL & Associates Properties (CBL) and WP Glimcher (WPG) posted negative returns of -23% and -28.3%, respectively, over the same period, whereas the broader iShares US Real Estate ETF (IYR) rose by a mere 0.1% YTD. Simon Property Group surged by 12% during the same period.
In this series, we’ll explore General Growth Properties 3Q15 earnings in detail, and we’ll discuss what factors could drive the company’s earnings in the coming quarters. We’ll also cover a few key points from the company’s 3Q15 earnings conference call.
Continue to the next part of this series for a look at how and why GGP’s revenues declined in 3Q15.