The performance of a stock is often a direct result of the earnings announced each quarter. It’s not uncommon to see a stock rise or fall by several percent immediately after quarterly earnings are reported, and the rally or decline may continue for days or even weeks thereafter.
Investors consider several factors, including whether the earnings beat the analyst estimates but also how the earnings compared to the year-over-year quarterly earnings. Even if the earnings exceed analysts’ expectations, a significant drop from the same quarter of the previous year may trigger a sell-off. The same is true for company revenue.
The most ideal earnings reports are those in which the company exceeded Wall Street’s expectations and bested its own earnings and revenue year over year.
Take a look at three real estate investment trusts (REITs) that recently beat Wall Street’s expectations and improved from the same quarter from the previous year:
Blackstone Mortgage Trust Inc. BXMT is a New York City-based mortgage REIT that originates senior loans with commercial properties as collateral. It services properties throughout North America as well as Europe and Australia. Its 199 senior loans portfolio has total assets of $26.7 billion.
On April 26, Blackstone Mortgage announced its first-quarter 2023 operating results. Adjusted earnings per share (EPS) of $0.79 beat the analyst estimates for $0.74 and was a 27.42% increase over EPS of $0.62 in the first quarter of 2022. First-quarter revenue of $174.19 million was above estimates of $170.4 million and a 30.27% increase over revenue of $155.72 million in the first quarter of 2022.
American Assets Trust Inc. AAT is a San Diego-based diversified REIT that owns and manages office, retail and residential properties throughout the U.S. Its properties are primarily in California, Oregon, Washington and Hawaii.
American Assets Inc. was a private company that was founded in 1967. In January 2011, it went public and changed its name to American Assets Trust. Today it owns 4.1 million square feet of rentable office space, 3.1 million square feet of retail space, a 369-room hotel and 2,110 multifamily units.
On April 25, American Assets announced its first-quarter 2023 operating results. Funds from operation (FFO) of $0.66 beat the Street’s view of $0.56 by 17.8% and was 15.7% better than FFO of $0.57 in the first quarter of 2022. Revenue of $107.75 million beat the estimate for $103.39 million and was 6.19% better than $101.47 million in the first quarter of 2022.
Eastgroup Properties Inc. EGP is a Ridgeland, Mississippi-based industrial REIT that operates primarily in the Southeastern states and the West Coast of the U.S. Distribution buildings account for 89% of its 57.1 million-square-foot portfolio. Eastgroup was founded in 1969 and is a member of the S&P Mid-Cap 400 and Russell 1000 indices.
On April 25, Eastgroup reported FFO of $1.84 per share, a 9.52% increase from $1.68 per share in the first quarter of 2022, and $0.03 better than the estimates. Revenue of $135.03 million beat the estimates by $1.98 million and was a 19.5% increase over revenue of $112.97 million in the first quarter of 2022.
Investors should consider other financial aspects of each stock and not just rely on one earnings report before making any purchases. But improving earnings is a good starting point in the decision-making process.
Over the past five years, private market real estate investments have outperformed the publicly traded REIT market by about 50%. Check out Benzinga’s Real Estate Offering Screener to discover the latest passive real estate investments.
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