On July 29, 2024, Equity Residential (EQR, Financial) released its 8-K filing for the second quarter of 2024, showcasing robust financial performance that surpassed analyst expectations. Equity Residential, a prominent real estate investment trust (REIT) with a portfolio of 302 apartment communities comprising approximately 80,000 units, focuses on high-quality properties in key urban and suburban markets across the United States.
Quarterly Performance Overview
Equity Residential reported earnings per share (EPS) of $0.47 for Q2 2024, a 27% increase from $0.37 in Q2 2023, significantly exceeding the analyst estimate of $0.39. The company's revenue for the quarter reached $734.37 million, aligning with market expectations.
Key Financial Metrics
For the second quarter of 2024, Equity Residential's Funds from Operations (FFO) per share was $0.94, a slight increase from $0.93 in the same period last year. Normalized FFO (NFFO) per share also saw a modest rise to $0.97 from $0.94 in Q2 2023.
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| EPS | $0.47 | $0.37 | 27.0% |
| FFO per share | $0.94 | $0.93 | 1.1% |
| Normalized FFO per share | $0.97 | $0.94 | 3.2% |
Operational Highlights
Equity Residential's same-store revenue increased by 2.9% year-over-year, driven by strong demand and limited supply in most markets. Same-store expenses grew by 2.7%, resulting in a 3.0% increase in same-store Net Operating Income (NOI). The company raised its guidance midpoint for same-store revenues to 3.2% and lowered the guidance midpoint for same-store expenses to 3.0%, reflecting improved physical occupancy and blended rates.
We are pleased to report results that exceeded our expectations and to be seeing positive forward momentum in our business which led us to significantly improve our guidance," said Mark J. Parrell, Equity Residential's President and CEO.
Investment Activity
Subsequent to the end of Q2 2024, Equity Residential acquired two properties with 644 apartment units in Atlanta and Dallas/Ft. Worth for $216.8 million. Additionally, the company is under contract to acquire a 202-unit property in Denver for $77.0 million. During the quarter, Equity Residential also sold two properties in suburban Washington, D.C., and San Francisco for $85.5 million.
Guidance and Outlook
Equity Residential updated its full-year 2024 guidance, projecting EPS between $3.04 and $3.10, up from the previous range of $2.91 to $3.01. The company also adjusted its FFO per share guidance to $3.72 to $3.78 and its Normalized FFO per share guidance to $3.86 to $3.92.
| Metric | Revised Guidance | Previous Guidance | Change at Midpoint |
|---|---|---|---|
| EPS | $3.04 - $3.10 | $2.91 - $3.01 | $0.11 |
| FFO per share | $3.72 - $3.78 | $3.74 - $3.84 | $(0.04) |
| Normalized FFO per share | $3.86 - $3.92 | $3.80 - $3.90 | $0.04 |
Equity Residential's strong performance in Q2 2024 underscores its resilience and strategic positioning in the REIT sector. The company's ability to navigate market challenges and capitalize on growth opportunities bodes well for its future prospects.
Explore the complete 8-K earnings release (here) from Equity Residential for further details.
