Essex Property Trust Q2 2022 Earnings Report
Key Takeaways
Essex Property Trust, Inc. reported a decrease in Net Income per diluted share but an increase in Core FFO per diluted share. Same-property revenues and net operating income increased, and the company revised its full-year earnings guidance.
Net Income per diluted share for the second quarter of 2022 was $0.87, compared to $1.00 in the second quarter of 2021, due to unrealized losses on marketable securities and non-core co-investments.
Core FFO per diluted share was $3.68, a 21.1% increase compared to the second quarter of 2021, exceeding the high-end of the Company’s guidance range.
Same-property revenues and net operating income increased by 12.7% and 16.7%, respectively, compared to the second quarter of 2021.
The Company repurchased 218,960 shares of common stock totaling $60.8 million, including commissions, at an average price per share of $277.81 under the stock repurchase program.
Essex Property Trust
Essex Property Trust
Essex Property Trust Revenue by Geographic Location
Forward Guidance
Essex Property Trust revised its full-year 2022 earnings guidance, decreasing Net Income per diluted share guidance and increasing Core FFO per diluted share guidance.
Positive Outlook
- Increased full-year Core FFO per diluted share guidance by $0.29 at the midpoint to $14.45, representing 15.7% year-over-year growth.
- Raised the midpoint of full-year same-property revenues and NOI by 0.7% and 1.4%, respectively.
- Full-year same-property operating expense guidance was lowered by 0.8% at the midpoint as a result of favorable property tax assessments in Washington.
- Return to office mandates at many of the large technology companies became a catalyst for strong housing demand in our Northern California and Seattle markets
- Immediately available liquidity is approximately $1.3 billion as of July 22, 2022
Challenges Ahead
- Decreased full-year Net Income per diluted share guidance by $0.31 as a result of unrealized losses on marketable securities and non-core investments in the second quarter.
- The COVID-19 pandemic and related variants, which remains inherently uncertain as to duration and severity, and any additional governmental measures taken to limit its spread and other potential future outbreaks of infectious diseases or other health concerns, which could continue to adversely affect the Company’s business and its tenants
- The Company may fail to achieve its business objectives
- The terms of any refinancing may not be as favorable as the terms of existing indebtedness
- Volatility in financial and securities markets
Revenue & Expenses
Visualization of income flow from segment revenue to net income