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The Long Beach, California-based company reported a net loss for the third quarter of $52.4 million or $0.18 per share, compared to net income of $119.6 million or $0.49 per share in the year-ago quarter.
Funds from operations or FFO applicable to common shares for the quarter was $32.2 million or $0.11 per share, compared to $174.3 million or $0.70 per share in the year-ago period.
FFO applicable to common shares for the quarter ended September 30, 2009 included the negative impact a $0.05 per share of impairments, a charge of $0.36 per share related to an accrued liability in connection with a jury verdict in the Ventas litigation and an income of $0.02 per share related to sales of marketable debt securities. Also included in the items impacting FFO was a gain on sales of real estate of $2.5 million.
Excluding items, adjusted FFO applicable to common shares was $149.3 million or $0.52 per share, down from $178.8 million or $0.72 per share in the same quarter last year.
On average, fourteen analysts polled by Thomson Reuters expected the company to earn $0.53 per share for the quarter. Analysts estimates typically exclude special items.
Loss from continuing operations for the third quarter was $45.53 million or $0.19 per share, compared to net income of $100.51 million or $0.36 per share in the same quarter a year ago.
Total revenues for the quarter decreased to $255.33 million from $267.85 million in the prior-year quarter. Five analysts had a revenue consensus of $250.81 million for the third quarter.
In the immediately preceding quarter, HCP's funds from operation in the second-quarter increased to $146.1 million or $0.55 per share over last year. However, profit declined to $91.8 million from the same quarter a year ago. Quarterly revenues improved to $267.34 million from $248.77 million in the same quarter last year.
Among competitors, Simon Property Group Inc. (SPG | Quote | Chart | News | PowerRating), Friday reported funds from operations for the first quarter that increased 2% to $473.07 million from a year ago, helped by stable performance of franchise retail assets within its regional mall, premium outlet and mills platforms. However, revenues for the quarter decreased to $924.93 million from $935.59 million in the prior-year quarter.
On August 3, HCP purchased a $720 million participation in first mortgage debt of HCR ManorCare, at a discount of $130 million, for about $590 million. The $720 million participation bears interest at LIBOR plus 1.25% and represents 45% of the $1.6 billion most senior tranche of HCR ManorCare's mortgage debt incurred as part of the financing for The Carlyle Group's acquisition of Manor Care, Inc. in December 2007.
During the quarter, HCP closed a $441 million public offering of 17.8 million shares of its common stock at a price of $24.75 per share. The company received net proceeds of $423 million, which were used to repay the total outstanding indebtedness under its revolving line of credit facility.
On August 20, HCP entered into two interest-rate swap contracts with an aggregate notional amount of $500 million that terminate in 2011. The interest-rate swap contracts reduced the company's net floating rate asset exposure, which had increased as a result of its additional investment in HCR ManorCare and third quarter repayments of floating rate debt.
On August 27, the company prepaid $100 million of variable rate mortgage debt. The mortgage debt, with an original maturity of January 2010, was repaid with proceeds from the company's August 2009 public equity offering and third quarter asset sales.
On October 29, HCP declared a quarterly cash dividend on its common stock of $0.46 per share. The dividend will be paid on November 24, 2009 to stockholders of record as of the close of business on November 9, 2009.
For the nine-month period, funds from operations applicable to common shares decreased to $306.42 million or $1.14 per share from $414.74 million or $1.77 per share in the same quarter a year ago.
Net income for the period dropped to $82.67 million or $0.31 per share from $390.36 million or $1.68 per share last year.
Total revenues for the period improved to $773.60 million from $760.65 million in the same period a year ago.
Looking ahead, the company said its full year 2009 outlook for FFO applicable to common shares, before giving effect to impairments and litigation provision, remains unchanged.
For the full year 2009, the company presently expects FFO applicable to common shares in the range of $2.10 - $2.16 per share, before giving effect to impairments and litigation provision.
The company currently sees FFO applicable to common shares to range between $1.65 and $1.71 per share, and net income applicable to common shares to range between $0.55 and $0.61 per share.
Analysts currently expect the company to earn $2.13 per share for fiscal 2009.
HCP is currently trading at $29.805, down $0.17 or 0.55%, on a volume of 1.50 million shares on the NYSE.
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