Colony NorthStar Inc. cut its quarterly dividend to 11 cents per share from 27 cents per share in releasing its fourth-quarter 2017 earnings, capping off a period that President and CEO Richard Saltzman described in the release as "on balance, a disappointing year" for the company.
"Our financial results were not as robust as anticipated based upon continuing negative headwinds in healthcare, retail broker-dealer distribution, and less than expected returns in our residual real estate private equity secondaries and [collateralized debt obligation] portfolios," Saltzman said, noting that the company would continue to be a net seller of noncore properties with a "conservative bias" to protect liquidity for deleveraging, potential stock repurchases and investments in growth areas "that are consistent with turbo-charging our investment management business."
Saltzman added that having "reset the dividend to approximate expected taxable income and net cash flow," the diversified real estate investment trust expects to be able to grow its payout in the future.
Colony NorthStar reported core funds from operations attributable to common interests in the operating company and common shareholders for the fourth quarter of $95.1 million, or 16 cents per share. For the quarter, FFO came to negative $295.5 million, or negative 51 cents per share.
The S&P Capital IQ consensus FFO-per-share estimate for the fourth quarter was 31 cents, with four analysts reporting.
During the fourth quarter, the company repurchased approximately 6.1 million shares of its class A common stock for $75 million, bringing total repurchases for the year to 23.4 million shares for $300 million. Colony NorthStar and partner Digital Bridge also closed on a new digital real estate infrastructure fund with $1.4 billion in total callable commitments, including a $117 million capital injection from the company's subsidiaries.
On Feb. 26, the company's board of directors provided a new repurchase authorization for up to $300 million of the company's outstanding shares.
