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Omega Healthcare tightens FY'19, Q4 adjusted FFO guidance with Q2 results

Omega Healthcare Investors Inc. disclosed funds from operations for the second quarter of $157.2 million, or 71.0 cents per share, a fall on a per-share basis from $154.5 million, or 74.0 cents per share, in the 2018 second quarter.

The company said second-quarter FFO includes a $6.7 million write-off of noncash revenue, $4.0 million of noncash stock-based compensation expense and $1.2 million of acquisition costs.

For the quarter, adjusted FFO rose from the year-ago period on a per-share basis to $169.2 million, or 77.0 cents per share, from $159.1 million, or 76.0 cents per share.

The S&P Global Market Intelligence consensus estimate for second-quarter FFO per share was 76 cents.

For the second quarter, total operating revenues came in at $225.3 million, up from $219.9 million from the year-ago quarter.

Omega Healthcare expects fourth-quarter FFO per share in the range of 74 cents to 77 cents and full-year FFO per share in the range of $2.86 to $2.90.

The company said it tightened its AFFO-per-share guidance for the full year and fourth quarter to a range of $3.03 to $3.07 and 76 cents to 79 cents, respectively. The healthcare real estate investment trust previously provided AFFO-per-share guidance in the range of $3.00 to $3.12 for the full year and in the range of 78 cents to 81 cents for the fourth quarter.

The S&P Global Market Intelligence consensus FFO-per-share estimates for the fourth quarter and full year are 79 cents and $3.08, respectively.

Subsequent to the second quarter, Omega reached a deal to acquire 60 facilities across eight states for $735 million, including approximately $390 million in assumed mortgage loans. The portfolio comprises 58 skilled-nursing facilities and two assisted-living facilities totaling 6,590 operating beds. The facilities are leased to two operators in three triple net leases with about $64 million in 2020 annual contractual cash rent. The deal is subject to consent by the U.S. Department of Housing and Urban Development, among other closing conditions.

The company also acquired three skilled-nursing facilities with approximately 320 beds in Virginia and North Carolina for about $24.9 million subsequent to the quarter. The facilities were added to an existing operator's master lease with a 9.5% initial cash yield. As of June 30, Omega had four properties classified as assets held for sale aggregating about $4.6 million, which it expects to sell over the next few quarters.