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SUI NYSE· Sun Communities, Inc
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SUI NYSE· Sun Communities, Inc
Earnings report Q3 2023

SUI Reports Strong Revenue Growth in Latest Quarter

Segments of Revenue

SUI, or Sun Communities, Inc., reported total revenues of $3.09 billion for the year ended December 31, 2022. The company operates in the real estate sector, primarily focusing on the ownership and operation of manufactured housing communities, recreational vehicle (RV) resorts, and marinas.

Within its real property segment, SUI generated $334.5 million in transient revenue for the three months ended September 30, 2022, representing 12.7% of total revenue. This segment includes wet slip and dry storage space leases, with seasonal fluctuations in revenue due to boating and weather patterns.

Strengths

SUI demonstrated strong revenue growth in the latest quarter, with total revenues reaching $3.09 billion for the year ended December 31, 2022. This represents a positive trend for the company, indicating its ability to attract customers and generate income from its real estate properties. The increase in revenue can be attributed to the acquisition of six land parcels in the US and the UK, as well as two buildings and land parcels related to its marinas in the US. These expansion activities have contributed to SUI's overall revenue growth.

Challenges

While SUI's revenue performance has been strong, there are some challenges to consider. The company incurred interest expenses of $84.1 million for the three months ended September 30, 2023, which is a significant cost that impacts its profitability. Additionally, SUI reported a loss on extinguishment of debt in previous periods, which further adds to its financial challenges. These factors highlight the importance of managing debt and interest costs effectively to maintain sustainable growth.

Noteworthy

It is worth noting that SUI recognizes seasonal real property revenue due to the nature of its business. For the year ended December 31, 2022, the company recognized $310.2 million in seasonal real property revenue for the first quarter, $20.1 million for the second quarter, $25.6 million for the third quarter, and $29.0 million for the fourth quarter. This seasonal revenue pattern reflects the demand for wet slip and dry storage space leases, which vary based on boating and weather conditions.

Summary

SUI's latest quarter performance showcases strong revenue growth, reaching $3.09 billion for the year ended December 31, 2022. The company's expansion activities, including land and building acquisitions, have contributed to this positive trend. However, SUI faces challenges in managing interest expenses and addressing previous losses on debt extinguishment. The seasonal nature of its real property revenue highlights the importance of understanding the fluctuations in demand for wet slip and dry storage space leases. Overall, SUI's revenue performance demonstrates its ability to attract customers and generate income from its real estate properties.

Source documents

Form 10-Q  filed on Oct 26, 2023
86 pages scanned

Reference data

Company financials Q3 revenue 727M
Analyst estimates Q3 EPS missed by -210.57%
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