- Realty Income Corp. is set to report its first-quarter 2024 results on May 6, with expectations of year-over-year growth in revenues and funds from operations (FFO) per share.
- The company’s portfolio, largely composed of industries selling essential goods and services, is likely to have supported stable rental revenue generation in the first quarter.
- However, higher interest expenses during the quarter may have offset some of the gains.
Realty Income Corp. is poised to report its Q1 2024 results, with projected growth in revenues and FFO per share. The company’s diversified portfolio is expected to contribute to stable rental revenue, despite potential setbacks from higher interest expenses.
Realty Income Corp. Q1 2024 Results Preview
Realty Income Corp., a monthly dividend-paying real estate investment trust (REIT), is scheduled to release its Q1 2024 results after market close on May 6. The company’s results are projected to show year-over-year growth in revenues and FFO per share. In the last reported quarter, Realty Income Corp. reported adjusted funds from operations (AFFO) per share of $1.01, which missed the Zacks Consensus Estimate by a penny. Despite this, the company reported year-over-year growth in the top line, benefiting from expansionary effects and a robust pipeline of opportunities globally.
US Retail Real Estate Market in Q1
According to a report from CBRE Group, U.S. net absorption fell in the first quarter due to slowing retail activity. The U.S. overall retail availability rate remained at 4.7%, even though supply additions surpassed net absorption in the first quarter. The quarter witnessed a significant decline in net absorption, which fell to 3.7 million square feet in the first quarter from 12.5 million square feet in the prior quarter. This decline was primarily led by store closures. Despite high construction costs, new retail development was at a low level, with completions aggregating 5.8 million square feet, down 32% from the prior quarter.
Realty Income Corp.’s Portfolio & Projections
Realty Income Corp.’s portfolio comprises a significant portion of top industries selling essential goods and services. The company enjoys a diversified tenant base with respect to tenant, industry, geography, and property type. It derives most of its annualized retail contractual rental revenues from tenants with a service, non-discretionary and/or low-price-point component to their business. This is likely to have supported stable rental revenue generation in the first quarter, boosting the top line. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.19 billion, suggesting a 26.15% increase from the year-ago quarter’s reported figure.
Conclusion
Realty Income Corp. is expected to report a strong first quarter for 2024, with projected year-over-year growth in revenues and FFO per share. The company’s diversified portfolio of tenants is likely to have contributed to stable rental revenue generation. However, higher interest expenses during the quarter may have offset some of these gains. The company’s activities during the quarter were not sufficient to gain analysts’ confidence, with the Zacks Consensus Estimate for the first-quarter FFO per share of $1.03 remaining unchanged over the past month.
