What's in the Offing for American Healthcare This Earnings Season?

Core Viewpoint - American Healthcare REIT, Inc. (AHR) is expected to report third-quarter 2024 results on Nov. 12, with anticipated year-over-year revenue growth but a potential decline in normalized funds from operations (FFO) per share [1][8]. Financial Performance - In the last reported quarter, AHR delivered a normalized FFO per share of 33 cents, exceeding the Zacks Consensus Estimate by 13.8%, with year-over-year growth in total portfolio same-store net operating income (NOI) [2][3]. - The Zacks Consensus Estimate for third-quarter resident fees and services is $463.3 million, up from $416.2 million in the prior year, while total revenues are projected at $512.9 million, indicating a 10.5% increase [7]. - The estimate for third-quarter real estate revenues is $46.9 million, reflecting a slight decrease from $47 million reported in the previous year [8]. Market Dynamics - AHR's portfolio includes clinical healthcare real estate properties, focusing on medical office buildings, senior housing, skilled nursing facilities, and hospitals, which likely experienced healthy demand in the third quarter [3]. - The integrated senior health campuses segment is expected to perform well, enhancing care access for residents [4]. - The senior housing operating portfolio (SHOP) is anticipated to benefit from an aging U.S. population and increased healthcare expenditure, contributing to high occupancy rates [5]. Challenges - High interest expenses are expected to negatively impact AHR's performance during the third quarter [6]. - The Zacks Consensus Estimate for normalized FFO per share has remained unchanged at 32 cents, indicating an 8.6% decrease from the previous year's figure [8][10]. Comparative Performance - Other healthcare REITs, such as Ventas, Inc. and Healthpeak Properties, Inc., reported positive results, with Ventas achieving a normalized FFO per share of 80 cents, a 6.7% increase year-over-year, and Healthpeak reporting 45 cents, beating estimates by a penny [11][12].