Realty Income Q1 revenue beats easily, FFO ekes past consensus (NYSE:O)

Realty Income (NYSE:O) turned in stronger-than-expected revenue in Q1 2023 after completing $598M of investment volume, and its earnings came in slightly higher than expected as its occupancy rate remained steady.

The net-lease REIT reaffirmed its 2024 guidance for normalization FFO at $4.17-$4.29, same-store rent growth at ~1.0%. And it still expects acquisition volume of ~$2.0B.

Q1 normalized FFO per share of $1.05, beating the average analyst estimate by a penny, rose from $1.00 in Q4 2023 and $1.04 in Q1 2023.

Revenue of $1.26B, topping the $1.10B consensus, climbed from $1.08B in the previous quarter and $944M a year ago.

Total expenses increased to $1.14B from $841.3M in the prior quarter and $723.7M a year ago. Provisions for impairment jumped to $89.5M from $27.3M in Q4 2023 and $13.2M in Q1 2023. Merger and integration-related costs surged to $94.1M from $9.93M in the prior quarter and $1.31M a year ago.

Portfolio occupancy rate of 98.6% at March 31, 2024, even with its occupancy rate at Dec. 31, 2024.

Realty Income (O) completed its previously announced merger with Spirit Realty Capital on Jan. 23, 2024.

“During the quarter, we completed $598M of investment volume at an initial weighted average cash yield of 7.8%,” said Realty Income President and CEO Sumit Roy. “Approximately 54% of total investment volume was in the UK and Europe at an initial weighted average cash yield of 8.2%. International growth continues to be a differentiating avenue for Realty Income to generate accretive earnings growth as our unique platform allows us to partner with best-in-class clients in a highly fragmented net lease market.”

Conference call on May 7 at 2:00 PM ET.

Previously, Realty Income FFO of $1.05 beats by $0.01, revenue of $1.26B beats by $160M