Exactly one week after Valentine’s Day, beleaguered real estate investment trust (REIT) Medical Properties Trust (MPW 5.56%) earned a little love on the stock market. Investors pushed the company’s share price up by more than 5%, topping the S&P 500 index’s marginal gain, following the release of quarterly and full-year results.
A flip into negative revenue, but a beat on profitability
In its fourth quarter, Medical Properties Trust posted negative revenue of $122 million, quite a shift from the year-ago positive result of $380 million. This unusual development occurred because of write-offs of rent and related line items for Steward Health. This is a major tenant for the REIT that has been experiencing significant liquidity problems, and remains behind on rent payments.
The Steward situation also affected the REIT’s profitability. The company said its normalized funds from operations (NFFO) sank to $218 million ($0.36 per share); the fourth quarter 2022 figure was $258 million.
Although analysts were, on average, expecting revenue to land well into positive territory at just over $291 million, they notably underestimated the REIT’s ability to turn a profit. Their collective projection for NFFO was only $0.27 per share.
No 2024 bottom-line guidance provided
It seems investors were cheered by that well-better-than-expected NFFO figure, which demonstrates that Medical Properties Trust can still execute effectively despite the drag of Steward Health. However, the company said in the earnings release that the uncertainty about that situation made it decide not to provide full-year 2024 guidance on net income or NFFO.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
