Senior Housing: Emeritus 2Q Loss Narrows, Helped By Rising Occupancy
Emeritus Corp.’s (ESC) second-quarter loss shrunk as the senior housing company’s higher occupancy and rising revenue helped it handily beat analysts’ estimates.
The Seattle provider of assisted-living, Alzheimer’s and dementia-care services said its second-quarter loss decreased to $7.3 million, or 18 cents a share, from $25.2 million, or 65 cents a share a year earlier, when results included a reduction of amortization of certain costs. The company posted a loss from continuing operations of 19 cents a share.
Analysts, on average, predicted a loss of 27 cents a share, according to Thomson Reuters.
Emeritus said revenue climbed to $219.1 million from $184.9 million, boosted in part by higher community revenue which accounts for the bulk of the company’s sales.
Emeritus, which seems to have bucked a declining occupancy trend in senior housing during the quarter, said its generally more need-driven assisted living business hasn’t been as affected by the economic downtrend that has been a drag on some of its competitors. While some industry watchers have said a higher unemployment level has hurt the senior housing space as adult children now have time to stay home with their aging parents instead of placing them into facilities, Emeritus said this impact has been overstated.
“We really haven’t seen that much of a shift [in occupancy due to unemployment],” said Co-Chief Executive Granger Cobb. Still, Cobb said consumer confidence has factored into some residents’ move-in decisions. “We saw some people delaying move-in as long as they possibily could, but as we emerge from coming out of the bottom of the recession we’ll see that backlog flow through.” He added the company is “pretty bullish” on future occupancies.
Total occupancy, an important figure measuring an operator’s overall health, rose a hair to 86.6% from 86.5%. Month-end occupancy on June 30 was 88.2%, up from 87.8% on March 31. Same-store total revenue rose 4.7% from a year earlier and same-store average revenue per occupied unit increased by about 3.4%.
During the second quarter, Emeritus said it acquired an 85-unit assisted living community it formerly managed. To that end, Cobb said the company has an eye out for acquisitions, a good sign for potential growth. He expects to see opportunities materialize potentially later this year and into next year.
“We are absolutely ready for acquisitions but in our mind the acquisition opportunities aren’t quite ready,” he said. Cobb said the company has an interest in some of Sunrise Senior Living Inc.’s (SRZ) buildings but not all of them.
As of June 30, Emeritus’ total consolidated operating portfolio, excluding discontinued operations, consisted of 265 communities.
Emeritus shares were recently changing hands at $13.23, up 25 cents.
-By Veronica Dagher for DOW JONES NEWSWIRES
