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Macerich (MAC) Q4 FFO Beats, Revenues Miss, Stock Down

The Macerich Company MAC reported fourth-quarter funds from operations (FFO) per share of 53 cents, excluding financing expenses in relation to Chandler Freehold, which surpassed the Zacks Consensus Estimate by a penny. The figure matched the prior-year quarter’s tally. Our estimate for the same was pegged at 51 cents.

However, shares of MAC lost 3.2% in the Feb 7 regular trading session on the NYSE following the release of its fourth-quarter results on lower-than-anticipated revenues.

Quarterly revenues of $228.2 million lagged the Zacks Consensus Estimate of $235.9 million. Also, the figure was lower than the year-ago quarter’s $229.4 million. We estimated revenues for the quarter to be $235 million.

In 2022, Macerich reported FFO per share of $1.96, excluding financing expenses in relation to Chandler Freehold, which outpaced the Zacks Consensus Estimate of $1.94. However, the figure compared unfavorably with the year-ago number of $2.03. Revenues of $859.2 million jumped 1.4% year over year but lagged the consensus mark of $868.7 million.

Behind the Headlines

The portfolio tenant sales per square foot for spaces less than 10,000 square feet in the trailing 12 months ended Dec 31, 2022, touched $869 compared with $801 as of Dec 31, 2019.

In 2022, portfolio tenant sales from comparable spaces less than 10,000 square feet increased 2.8% from 2021.

As of Dec 31, 2022, portfolio occupancy was 92.6%, up from 91.5% on Dec 31, 2021. We projected the same to be 92.6%.

For the 12 months ended Dec 31, 2022, re-leasing spreads were 4% more than the expiring base rent.

Same-center net operating income (NOI), including lease termination income, increased 0.7% year over year to $215.9 million.

Balance Sheet

As of Dec 31, 2022, MAC had around $512 million of liquidity, including unrestricted cash in hand aggregating almost $158 million. The balance represented the available capacity on its revolving line of credit.

2023 Guidance

Macerich expects 2023 FFO per share, excluding financing expenses in relation to Chandler Freehold, in the range of $1.75-$1.85. The Zacks Consensus Estimate for the same is currently pegged at $1.84, which lies in the guided range.

Currently, Macerich carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Macerich Company (The) Price, Consensus and EPS Surprise

Macerich Company (The) Price, Consensus and EPS Surprise
Macerich Company (The) Price, Consensus and EPS Surprise

Macerich Company (The) price-consensus-eps-surprise-chart | Macerich Company (The) Quote

Performance of Other REITs

Simon Property Group, Inc.’s SPG fourth-quarter 2022 comparable FFO per share of $3.15 exceeded the Zacks Consensus Estimate of $3.14. The figure compares favorably with the year-ago quarter’s $3.11.

This performance was backed by a better-than-expected top line. SPG’s results reflected a healthy operating performance and growth in occupancy levels. However, the retail REIT behemoth’s 2023 comparable FFO per share projection was lower than expected.

Alexandria Real Estate Equities, Inc. ARE reported fourth-quarter 2022 AFFO per share of $2.14, surpassing the Zacks Consensus Estimate by a cent. The reported figure also compared favorably with the year-ago quarter’s $1.97.

ARE’s results reflected decent leasing activity and rental rate growth during the quarter.

Boston Properties Inc.’s BXP fourth-quarter 2022 FFO per share of $1.86 outpaced the Zacks Consensus Estimate of $1.84. The figure increased 18.7% year over year.

The quarterly figure also exceeded the mid-point of the company’s fourth-quarter guidance by a cent, reflecting portfolio outperformance. In addition, BXP experienced solid leasing activity in the quarter. The company revised its 2023 outlook for FFO per share.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.

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