Mid America Apartment Communities (MAA) has reported a 8.38 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $39.39 million, or $0.44 a share in the quarter, compared with $42.99 million, or $0.57 a share for the same period last year.
Revenue during the quarter grew 16.66 percent to $307.20 million from $263.34 million in the previous year period.
Cost of revenue rose 14.35 percent or $10.58 million during the quarter to $84.34 million. Gross margin for the quarter expanded 55 basis points over the previous year period to 72.54 percent.
Total expenses were $263.34 million for the quarter, up 41.15 percent or $76.77 million from year-ago period. Operating margin for the quarter contracted 1487 basis points over the previous year period to 14.28 percent.
Operating income for the quarter was $43.86 million, compared with $76.76 million in the previous year period.
For financial year 2017, Mid America Apartment Communities expects revenue to grow in the range of 3 percent to 3.50 percent. The company projects diluted earnings per share to be in the range of $1.82 to $2.02.
Revenue from real estate activities during the quarter increased 16.66 percent or $43.86 million to $307.20 million.
Income from operating leases during the quarter rose 17.83 percent or $43.04 million to $284.46 million.
Revenue from other real estate activities during the quarter was $22.74 million, up 3.76 percent or $0.82 million from year-ago period.
Eric Bolton, chairman and chief executive officer, said, "Results for the quarter were better than expected. Core FFO of $1.50 per share, which was one cent above the mid-point of our prior guidance range, was achieved despite dilution from the Post Properties Merger, which was not included in our guidance. Solid leasing conditions and strong occupancy levels continued across the portfolio. During the quarter we successfully closed on one additional opportunistic property acquisition, and we completed the disposition of five older properties in line with our strategy of steadily recycling capital and strengthening our long-term earnings profile."
Accounts payable surged 102.13 percent or $6.05 million to $11.97 million on Dec. 31, 2016.
Total assets jumped 69.46 percent or $4,756.71 million to $11,604.49 million on Dec. 31, 2016. On the other hand, total liabilities were at $4,952.32 million as on Dec. 31, 2016, up 34.51 percent or $1,270.61 million from year-ago.
Return on assets moved down 46 basis points to 0.65 percent in the quarter. At the same time, return on equity moved down 77 basis points to 0.59 percent in the quarter.
Debt increases substantially
Total debt was at $4,499.71 million as on Dec. 31, 2016, up 31.28 percent or $1,072.14 million from year-ago. Shareholders equity stood at $6,642.10 million as on Dec. 31, 2016, up 109.79 percent or $3,476.03 million from year-ago. As a result, debt to equity ratio went down 41 basis points to 0.68 percent in the quarter.
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