What happened
It's rare when a publicly traded company delivers an estimate-trouncing quarter, then sees its share price sink.
That was the unusual dynamic with Medical Properties Trust (MPW -0.22%) this week; the REIT's share price headed downward after the real estate investment trust (REIT) unveiled its final set of earnings for 2022 on Thursday. According to data compiled by S&P Global Market Intelligence, as of Friday morning before market open the company's stock was down by 14% week to date.
So what
Medical Properties Trust's fourth quarter saw the REIT earn just under $380.5 million in revenue, which was down from the more than $409 million in the same period one year previous. Normalized -- i.e., adjusted -- funds from operations (FFO, considered to be the most important REIT profitability metric) also slipped, declining to $258 million ($0.43 per share) from the year-ago tally of $279 million.
Both headline figures were well ahead of prognosticator projections. On average, analysts following Medical Properties Trust stock were modeling less than $366.5 million on the top line, and only $0.27 per share for normalized FFO.
A double beat is certainly encouraging, but a double decline can produce quite the opposite effect. Investors might have been more concerned with this erosion in the fundamentals than beating estimates.
Now what
Other factors could be behind the market's negative reaction. One is the resignation of co-founder and chief operating officer Emmett McLean, who is departing Medical Properties Trust after over two decades at the company. The REIT describes McLean as "an integral part of the company's success," so presumably his services will be missed.
Another is the REIT's quarterly dividend. Last week Medical Properties Trust declared its latest payout, which matched its four predecessors. In recent years the company's habit has been to enact a dividend raise at the start of every year; some investors might see this as a sign of struggle.
