Ventas Inc.'s (VTR) first-quarter earnings fell 6.9% on
acquisition-related charges as the company reported stronger
revenue and funds from operations, a key measure of performance for
REITs, beat analysts' expectations.
Ventas, the largest U.S. owner of senior housing and
assisted-living facilities, in February agreed to acquire rival
Nationwide Health Properties Inc. (NHP) in a $5.8 billion deal as
demand for senior housing continues to grow.
Meanwhile, Nationwide Health's first-quarter earnings surged 61%
amid a $10.7 million asset-sale gain as the health-care real-estate
investment trust also beat analysts' expectations.
After the deal closes, expected in the third quarter, Ventas,
which affirmed its 2011 guidance, will have a total of 1,300
properties in 47 states, the District of Columbia and two Canadian
provinces.
Ventas made $3.7 billion in acquisitions last year in its push
to expand market share. Nationwide Health purchased nearly $1
billion in health-care properties in 2010.
Ventas reported a profit of $49 million, or 30 cents a share,
down from $52.6 million, or 34 cents a share, a year earlier.
Excluding items, FFO was up at 75 cents from 67 cents.
Revenue increased 12% to $270.5 million.
Analysts polled by Thomson Reuters most recently forecast FFO of
74 cents on revenue of $265 million.
Net operating income after management fees for the 79 properties
managed by Sunrise Senior Living Inc. (SRZ) rose 7.3% on stronger
occupancy and average daily rates, as well as lower management
fees.
Nationwide Health reported a profit of $50.6 million, or 39
cents a share, up from $31.4 million, or 26 cents, a year earlier.
Excluding asset-sale gains and other items, FFO was up at 65 cents
from 54 cents.
Revenue increased 21% to $122.4 million.
Analysts polled by Thomson Reuters most recently forecast FFO of
62 cents on revenue of $115.8 million.
Shares of Ventas and Nationwide Health closed Wednesday at
$56.07 and $43.85, respectively. Neither was active premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com
