Photo: Carlos Delgado; CC BY-SA (archive)
UDR raised its full-year adjusted funds-from-operations outlook, Valaris reported stronger sequential operating results as drillships returned to work, and trucking company PAMT reported a wider quarterly net loss in earnings releases issued Monday after the market close.
The reports cover different corners of the economy: apartment operations and property partnerships, offshore drilling demand, and freight rates facing higher costs. They also illustrate why headline profit figures and management’s adjusted measures need to be read separately.
UDR raises adjusted FFO outlook, but not every measure
Apartment owner UDR reported third-quarter net income of $0.67 per diluted share, up from $0.12 a year earlier. Funds from operations were unchanged at $0.62 per share, and FFO as adjusted was flat at $0.65.
UDR raised its full-year FFOA range to $2.54-$2.56 per share from $2.49-$2.57. That increased the midpoint by two cents to $2.55 while narrowing the range.
The revision was not an across-the-board increase. The company updated its FFO range to $2.48-$2.50 from $2.47-$2.55, lowering that midpoint by two cents to $2.49. Its net-income outlook increased to $1.58-$1.60 from $1.03-$1.11.
The full results followed preliminary figures released October 21. UDR said third-quarter total revenue declined 0.9% as property sales offset growth from same-store and acquired communities.
UDR also said it closed a $2 billion strategic partnership with Apollo, contributing 19 apartment communities containing 7,059 homes to a joint venture. It received $1.34 billion of equity capital, retained an approximately one-third interest and will continue to operate and manage the properties.
The company adjusted its same-store growth presentation to exclude those 19 communities. That portfolio change matters when comparing the new operating growth figures with older disclosures. FFO and FFOA are non-GAAP measures and are not interchangeable with net income.
Valaris adds backlog as drillship work increases
Offshore drilling contractor Valaris reported $594 million in operating revenue, $47 million in net income and $151 million in adjusted EBITDA for the third quarter.
Net income was in line with the second quarter, while adjusted EBITDA increased from $97 million. Revenue excluding reimbursable items rose to $556 million from $502 million, helped by more operating days and higher average daily revenue in the floater fleet.
Chief Executive Anton Dibowitz said all ten active drillships were on contract after the company returned four drillships to work this year following significant idle periods. Valaris added approximately $600 million of contract backlog since its second-quarter report, bringing the total to about $4.8 billion.
The company estimated that Middle East conflicts reduced quarterly adjusted EBITDA by about $24 million, compared with $30 million in the second quarter. It said the impact began to moderate as war-risk insurance costs fell and two jackups resumed bareboat charters.
Valaris said its pending combination with Transocean had received required regulatory approvals and was anticipated to close on or about December 1. That remains an expected closing, not a completed transaction.
PAMT revenue rises, but costs outweigh rate gains
Truckload carrier holding company PAMT reported third-quarter revenue of $162.5 million, up 8.2% from $150.3 million a year earlier. Its net loss widened to $8.1 million, or $0.38 per share, from $5.6 million, or $0.27 per share.
The operating loss narrowed to $5.0 million from $5.7 million. The distinction is important: a wider bottom-line loss did not mean the operating loss also widened.
President Lance Stewart said rate per mile improved 11% sequentially and 6% year over year. However, higher net fuel costs, driver recruitment and retention costs, and reduced gains on used-equipment sales offset those improvements.
PAMT said fuel surcharges typically lag changes in diesel prices by a week or more, leaving a timing mismatch when fuel prices rise quickly. It reported $102 million of available liquidity and $323.1 million in outstanding debt at September 30.
The three releases show distinct operating trends rather than a single market-wide earnings signal. UDR’s adjusted guidance improved, Valaris benefited from returning rigs to service, and PAMT’s pricing gains were not yet enough to produce a quarterly profit.
JBizNews Desk | New York
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