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EQR NYSE· Equity Residential
Earnings report Q3 2023

EQR Reports Steady Revenue Growth in Latest Quarter

Segments of revenue

EQR's revenue for the latest quarter showed growth across its various segments. Rental income remained the largest contributor, accounting for approximately 90% of total revenue. Rental income increased by 1.4% compared to the same quarter last year, reaching $615.6 million. This growth can be attributed to higher occupancy rates and rental rate increases. Other sources of revenue, such as fees and services, also saw positive growth, with a 0.8% increase to $21.0 million.

Strengths

EQR's financial performance in the latest quarter reflects several strengths. The company benefited from additional resident payments due to governmental rental assistance programs, which positively impacted bad debt, net. This resulted in a decrease in bad debt expenses, contributing to improved profitability. EQR's focus on acquiring and managing residential properties in desirable locations attracted affluent long-term renters, ensuring a steady stream of rental income. The management's commitment to creating thriving communities further enhances the company's appeal to potential tenants.

Challenges

Despite the overall positive performance, EQR faced some challenges in the latest quarter. The company experienced a decrease in net income available to Units – General Partner, which declined by 15.3% to $322.3 million compared to the same quarter last year. This decline can be attributed to higher OP Units – General Partner distributions and acquisition costs related to partially owned properties. Additionally, the change in market value of Redeemable Limited Partners had a negative impact on the company's financials.

Noteworthy

It is worth mentioning that EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. This indicates a strong financial position and reduces the company's exposure to interest rate risks. Furthermore, EQR's Employee Share Purchase Plan (ESPP) and share-based employee compensation expense demonstrate the company's commitment to incentivizing and rewarding its employees.

Summary

EQR's latest quarter performance showed steady revenue growth, primarily driven by rental income. The company's focus on acquiring and managing residential properties in attractive locations contributed to increased occupancy rates and rental rate growth. EQR also benefited from additional resident payments due to governmental rental assistance programs, resulting in improved bad debt, net. However, challenges such as a decrease in net income and acquisition costs impacted the company's financials. Overall, EQR's strong financial position, absence of indebtedness, and commitment to employee compensation highlight its resilience in the market.

Source documents

Form 10-Q  filed on Nov 02, 2023
84 pages scanned

Reference data

Company financials Q3 revenue 728M
Analyst estimates Q3 EPS missed by -2.14%
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