HCP Shares Fall on Unexpected Loss
February 09 2016 - 1:00PM
Dow Jones News
HCP Inc. swung to an unexpected fourth-quarter loss on a
write-down related to HCR ManorCare, which turned in a
weaker-than-anticipated performance amid continuing challenges in
the skilled-nursing sector.
The real-estate investment trust's shares, down 34% in the past
12 months, fell 15% to $28.93 in midday New York trading as HCP's
2016 profit guidance missed expectations.
For the year, HCP projected per-share earnings of $1.49 to
$1.55, while analysts polled by Thomson Reuters expected $1.90.
HCP's invests in real estate in the senior-housing,
skilled-nursing, life-sciences, medical-office and hospital sectors
of the health-care industry.
The Irvine, Calif., company's outlook reflects reduced
expectations for HCR ManorCare, as the skilled-nursing sector faces
challenges related to the shift in patients from the traditional
fee-for-service model to managed care, as well as shorter lengths
of patient stays.
HCR ManorCare is in the process of shedding 50 nonstrategic
assets and completed sales of 21 of those assets during the
quarter.
Over all, HCP reported a loss of $598.9 million, or $1.29 a
share, compared with a year-earlier profit of $196.6 million, or 43
cents a share. The latest period includes net asset write-downs of
$810.9 million.
Funds from operations, excluding certain items—a key measure of
performance for REITs—rose to 80 cents a share from 79 cents a
share.
Total revenue increased 11% to $668 million, including rental
and related revenue growth of 6.9% to $299.1 million. Resident fees
and services revenue climbed 53% to $158.3 million.
Analysts polled by Thomson Reuters expected per-share profit of
25 cents and revenue of $614.28 million.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
February 09, 2016 12:45 ET (17:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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