What to Expect When Health Care REIT (HCN) Reports Third-Quarter Earnings Tuesday

NEW YORK (TheStreet) -- Shares of Health Care REIT  (HCN) fell 0.35% to $70.86 in afternoon trading Monday ahead of the company's scheduled third-quarter earnings report Tuesday before the market open. Here's what analysts are expecting from the real estate investment trust.

The consensus estimate calls for Health Care REIT to report earnings of $1.03 a share on revenue of $834.06 million. In the third quarter last year, Health Care REIT posted earnings of 97 cents a share, which edged analysts' expectations of 96 cents a share. Revenue totaled $777.86 million, which surpassed the consensus estimate of $741.99 million.

In the second quarter of 2014, Health Care REIT reported earnings of $1.06 a share, which beat analysts' estimate of $1.02 a share. Revenue totaled $815.49 million, which surpassed the consensus estimate of $807.85 million.

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Separately, TheStreet Ratings team rates HEALTH CARE REIT INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HEALTH CARE REIT INC (HCN) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year, reasonable valuation levels, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 21.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 989.5% when compared to the same quarter one year prior, rising from $8.09 million to $88.18 million.
  • Net operating cash flow has significantly increased by 62.79% to $336.87 million when compared to the same quarter last year. In addition, HEALTH CARE REIT INC has also vastly surpassed the industry average cash flow growth rate of -64.23%.
  • You can view the full analysis from the report here: HCN Ratings Report

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