Investors were bearish on the equity of Alexandria Real Estate Equities (ARE +1.66%) throughout Tuesday's trading session. After the office space-focused real estate investment trust (REIT) reported its latest quarterly results, its stock fell and continued to wallow. It closed the day almost 6% lower in price. Meanwhile, the benchmark S&P 500 (^GSPC +0.58%) crawled 0.6% higher.
Flipping into the red
For its first quarter of 2025, Alexandria's total revenue came in at just under $758 million. This was down some distance from the $769 million of the same period in 2024. The company's net loss according to generally accepted accounting principles (GAAP) was $11.6 million, or $0.07 per share. That was quite the shift from the first quarter 2024's nearly $167 million profit.
However, funds from operations (FFO) is considered a truer yardstick for a REIT's profitability. Alexandria was well in the black on that metric, although it suffered a year-over-year fall to $392 million ($2.30 per share) from almost $404 million.
The company missed badly on the bottom line; analysts tracking Alexandria's stock were anticipating a profit of $0.76 per share. At least it beat on revenue, as those pundits were collectively modeling a figure of less than $752 million.
NYSE: ARE
Key Data Points
A big chop to guidance
Sentiment on Alexandria was also effected by significant cuts in guidance for full-year 2025. The company now feels it will earn $1.36 to $1.56 per share in GAAP net income, which is a much lower range than its previous forecast of $2.57 to $2.77. The consensus analyst is $3.80.
FFO guidance for the year was also reduced, to a range of $8.51 to $8.71 per share; previously, management was predicting $9.23 to $9.43.
To put it mildly, the office segment of the real estate market remains volatile, due to the persistence of work-from-home arrangements. It might be best to stay away from Alexandria and other office REITs because of this.
