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American Homes 4 Rent misses earnings expectations

Posts net loss of $12.8M on $110.4M 3Q14 revenues

A leader and pioneer in the field in field of single-family rental securitizations, American Homes 4 Rent (AMH) reported third quarter earnings per share of $0.15, missing analyst expectations by $0.02, but with revenue for the quarter printing at $110.4 million versus the consensus estimate of $109.2 million.

The company had a net loss of $12.8 million for the third quarter of 2014.

"The single-family rental concept continues to be validated as we continue to acquire exceptional quality homes, see strong tenant demand for our homes and experience high tenant retention with rental rate increases in excess of 4% to new tenants on releasing" said David Singelyn, American Homes 4 Rent's Chief Executive Officer.

Total revenues increased 17.1% to $110.4 million for the third quarter of 2014 from $94.3 million for the second quarter of 2014. Revenue growth was driven by continued strong leasing activity, as total leased portfolio grew by 2,797 homes during the third quarter of 2014.    

Total revenues were $282.0 million for the nine-month period ended September 30, 2014. Revenue growth was driven by continued strong leasing activity, as total leased portfolio grew by 8,833 homes during the nine months ended September 30, 2014.    

Net loss totaled $23.1 million for the nine months ended September 30, 2014.

Highlights for the quarter included:

  • Total portfolio increased by 3,704 homes to 30,877 as of September 30, 2014, from 27,173 as of June 30, 2014. As of September 30, 2014, the company had 26,161 leased properties, an increase of 2,797 leased properties from June 30, 2014.
  • Continued strong occupancy, with 94.1% of properties leased that have been previously leased or rent-ready for more than 90 days and total portfolio occupancy of 84.7%.
  • In July 2014, completed the acquisition of Beazer Pre-Owned Rental Homes, which added 1,372 homes located in markets in Arizona, California, Florida and Nevada to the company's portfolio.
  • Completed securitization transaction in September 2014, which raised gross proceeds of $487.7 million, with a duration-adjusted weighted-average coupon rate of 4.42% for a ten-year term.

As of September 30, 2014, the company had 26,161 leased properties, an increase of 2,797 properties from June 30, 2014. At September 30, 2014, the leased percentage for properties that have been rent-ready for more than 90 days or initially leased after completing renovations was 94.1%, compared to 94.7% at June 30, 2014.   

In September 2014, the company raised $487.7 million in gross proceeds through the issuance and sale of single-family rental pass-through certificates that represent beneficial ownership interests in a loan secured by 4,487 homes transferred to an affiliate from the company's portfolio of single-family properties. The offering had a duration-adjusted weighted-average coupon rate of 4.42% for a ten-year term.

The company is working on its next securitization loan transaction, which it expects to close in the fourth quarter.

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