Health Care REIT's 2nd-Quarter Profit Down 92% Amid Property Sales Losses

Publish Date:

Tuesday, August 6, 2013

Category:

News Organization:

The Wall Street Journal

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Health Care REIT Inc.'s (HCN) second-quarter earnings fell 92% amid losses on the sales of properties, though revenue and a key measure of performance for real-estate investment trusts improved.

Health Care REIT has become one of the largest owners of senior housing in the world with its acquisition of Sunrise Senior Living Inc. The company has continued to expand its portfolio of properties through acquisitions, including a June deal to acquire joint-venture partner Merrill Gardens' 20% equity interest for $173 million and its $697 million deal in May to acquire a majority stake in 47 senior-housing communities from Canadian senior-housing operator Revera Inc.

The company has been shifting its focus toward private-pay senior housing, with the portion of private payers increasing to 82% in the latest period from 74% a year earlier.

Health Care REIT reported a profit of $6.3 million, down from $76.9 million a year earlier. On a per-share basis, which includes preferred dividend impacts, the company posted a loss of three cents, compared with year-earlier earnings of 25 cents. The latest period included $30 million in losses on property sales.

Normalized FFO rose to 93 cents a share from 89 cents.

Revenue increased 27% to $682.1 million.

Analysts polled by Thomson Reuters recently expected per-share FFO of 92 cents and revenue of $675.3 million.

Rental income was up 15% while resident fees and service revenue more than doubled.

Shares of Health Care REIT, which affirmed its 2013 FFO outlook, closed Monday at $63.34 and were inactive in recent premarket trading. The stock is up 3.3% this year.

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