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W.P. Carey Falls 5% on Q1 Results, Guidance Suspension

By Eric Volkman - May 1, 2020 at 9:16PM

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The veteran REIT appears to have held up well in the early days of the coronavirus pandemic, but uncertainty lies ahead.

One of the more durable real estate investment trusts (REITs) on the market wasn't a big winner with investors on Friday. Shares of W.P. Carey (WPC -0.72%) fell, even though the company reported Q1 of fiscal 2020 results showing growth in numerous key line items.

For the quarter, W.P. Carey booked total revenue of $309 million, which was 3.6% higher than the year-ago result. GAAP attributable net income came in at just over $66 million ($0.38 per share), down from the nearly $69 million of Q1 2019. On an adjusted basis, funds from operations (FFO) -- the most significant profitability metric for REITs -- climbed 7% higher to land at over $216 million, or $1.25 per share.

Leased sign on the window of a building.

Image source: Getty Images.

On average, analysts were estimating the company's net income would come in at $0.47 per share on revenue of $292 million.

As for operational yardsticks, the company's portfolio consisted of 1,235 properties at the end of the quarter. The occupancy rate was 98.8%.

W.P. Carey, like many companies operating inside the great economic uncertainty caused by the SARS-CoV-2 coronavirus outbreak, has elected to pull its full-year 2020 guidance. In doing so, it said that, "While our first quarter results were largely unaffected by COVID-19 and our April rent collections were strong, we are cautious about the pandemic's impact on the global economy."

That being said, the REIT added that, in spite of the disruptions to its business, "we believe we're well-positioned for a range of environments ahead, given our balance sheet strength and the diversification within our portfolio."

Investors might not necessarily agree. They bid W.P. Carey's shares down by 5% on Friday, which was a steeper fall than that endured by the benchmark equities indexes.

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