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Real estate investment trusts (REITs) are in trouble just one week after Valentine’s Day Medical Property Trust (New York Stock Exchange: MPW) I won a little love in the stock market. Investors pushed the company’s stock price up more than 5%, outperforming its stock price. S&P500 The index rose slightly following the release of quarterly and full-year results.
Revenue turned negative, but profitability improved significantly
In the fourth quarter, Medical Properties Trust’s revenue was negative $122 million, a significant change from positive revenue of $380 million in the year-ago period. This unusual development resulted from the amortization of Steward Health’s rent and related items. This is his REIT’s main tenant, but it is facing significant liquidity issues and remains behind on its rent payments.
The stewardship situation also affected REIT profitability. The company announced that normalized funds from operations (NFFO) decreased to $218 million, or $0.36 per share. The numbers for the fourth quarter of 2022 were $258 million.
Analysts, on average, expected revenue to reach positive territory of just over $291 million, but they significantly underestimated the REIT’s ability to generate profits. Their joint estimate for NFFO was just $0.27 per share.
No guidance provided for 2024 revenues.
Investors appear to have been delighted with the much better-than-expected NFFO numbers, showing that Medical Property Trust can still perform efficiently despite the impact of Steward Health. However, the company said in its earnings call that it has decided not to provide full-year 2024 guidance on net income or NFFO due to the uncertainty of that situation.
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Eric Volkman has no position in any stocks mentioned. The Motley Fool has no position in any stocks mentioned. The Motley Fool has a disclosure policy.
Why Medical Real Estate Trust Stocks Are Up 5% Today was originally published by The Motley Fool
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