HCP Inc.’s Profits, FFO Soar in Q1 After Making $40 Million of Investments

Healthcare real estate investment trust HCP Inc. saw its net income attributable to common shares more than double in the first quarter ended March 31, 2012, to $175.3 million, compared to $63.9 million the previous year. Net income applicable to common shares rose to $0.43, compared to $0.17 in 2011.

FFO per share increased 60% in the first quarter to $0.64 from $0.40 during the same period of last year, and HCP raised its full-year guidance for adjusted FFO to range between $2.71 and $2.77 per share. 

Total revenues increased 39% to $459 million, with nearly half of that derived from rental and related revenues. 


Net operating income, at $390.4 million, was nearly 59% above 2011’s $245.6 million. Adjusted NOI was $354.1 million, while adjusted NOI for new property portfolios had a net loss of $132.9 million. The REIT’s same property, stabilized portfolio netted $221.2 million.

HCP made $40 million in investments in the first quarter to fund development and other capital projects, mostly in its senior housing and life science segments. The REIT also sold a medical office building for $7 million for a $3 million gain.

In the first quarter, HCP completed $809 million of capital market transactions, broken into $450 million of 3.65% senior unsecured notes, due in 2019; and $359 million of common stock priced at $39.93 per share. In March, HCP redeemed 4 million shares of 7.15% (blended rate) preferred stock for $296 million with proceeds from the common stock offering, which served to improve the REIT’s credit profile.


View the full first quarter earnings report here.

Written by Alyssa Gerace

Companies featured in this article: