HCP Profit Rises 22%, Gives Soft 2014 Outlook

   By Everdeen Mason 
 

HCP Inc. (HCP) said its fourth-quarter earnings rose 22% as the senior-focused real-estate investment trust posted growth in its rental segment.

The company also offered a 2014 outlook for funds from operations, a key measure of performance for REITs, that falls short of the consensus estimates. It expects adjusted FFO of $2.96 to $3.02 a share, versus analysts' estimate of $3.04 a share.

HCP--one of the largest health-care landlords in the U.S. with investments in senior housing, medical offices and skilled nursing properties--has logged increased revenue in recent periods due in part to acquisitions and higher resident fees.

During the quarter, HCP fired James Flaherty as its chief executive and chairman after a decade at the helm, pointing to a loss in confidence in his leadership style amid a slew of executive turnover. The company named Jones Lang LaSalle Inc. (JLL) executive Lauralee Martin as its new CEO and appointed lead director Michael McKee as non-executive chairman.

Overall, HCP reported a profit of $293.1 million, or 64 cents a share, up from $241 million, or 53 cents a share, a year earlier. Revenue rose 5.4% to $530.3 million.

Analysts polled by Thomson Reuters most recently forecast earnings of 48 cents a share and revenue of $510 million.

Adjusted funds from operations--which exclude certain impairments--rose to 76 cents a share from 72 cents. Analysts had expected adjusted FFO of 75 cents a share.

The latest period include $870,000 related to severance charges.

Rental and related revenue, the largest top-line contributor, climbed 3.9% to $284.7 million.

Shares closed at $38.82 on Monday and were inactive premarket. The stock is down 17% in the past 12 months.

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