Health Care REIT Inc.'s (HCN) first-quarter profit surged 88% as
the health-care real estate investment trust posted growing revenue
and gains from real estate sales, the company said Monday.
The sales gains also led Health Care to raise its per-share
earnings outlook, but it lowered its normalized
funds-from-operations target to reflect additional secured debt
capital transactions.
The health-care REIT sector hasn't been hurt by the recession as
much as retail and industrial REITs, but weak fundamentals in
senior housing and the possibility of major tenant bankruptcies
have still affected the industry. Meanwhile, plans to boost health
care spending are seen as having a more long-term impact, and could
even hurt some operators if it affects their ability to raise
rents.
Health Care, a REIT that invests in long-term care facilities,
reported earnings of $66.7 million, or 56 cents a share, up from
$35.5 million, or 34 cents a share.
The latest period included $17 million of gains from real-estate
sales, compared with gains of about $26,000 in the year-earlier
period.
Normalized funds from operations grew to 81 cents from 79 cents
a share.
Gross revenue increased 14% to $144.3 million.
Analysts polled by Thomson Reuters expected funds from
operations of 79 cents on revenue of $145 million.
Looking ahead, the company raised its per-share earnings
forecast by 11 cents to a range of $1.70 to $1.80 and lowered its
normalized funds from operations view by 10 cents to a range of
$3.10 to $3.20.
A majority of Health Care REIT's investments are in
assisted-living facilities for the elderly, but it also has stakes
in specialty care facilities. The diversification of the company's
portfolio is seen as a positive factor that can help offset some
near-term pressures on occupancy and rental growth.
Shares were inactive in after-hours trading Monday, after
closing up 5.7% in the regular session at $34.93 amid a broad
market rally.
-By John Kell, Dow Jones Newswires, 201-938-5285, john.kell@dowjones.com