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UH

UNIVERSAL HEALTH REALTY INCOME TRUST (UHT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered modest growth with net income of $4.7 million and diluted EPS of $0.34, up from $3.6 million and $0.26 in Q4 2023, driven by higher income at various properties partially offset by higher interest expense .
  • Funds From Operations (FFO) increased to $11.8 million, or $0.85 per diluted share, versus $11.4 million, or $0.82, in Q4 2023; adjusted net income rose by $0.06 per share year over year .
  • Revenue components were stable sequentially with total Q4 revenue of $24.642 million versus $24.494 million in Q3 and $24.734 million in Q2; interest expense continued to be a headwind (Q4: $4.921 million) .
  • Dividend was increased by $0.005 to $0.735 per share for Q4 (paid December 31, 2024), a supportive capital returns signal for yield-focused investors .
  • Balance sheet flexibility improved via a larger revolving credit facility ($425 million capacity, extended to 2028) and a new $85 million interest rate swap at a 3.2725% fixed rate, mitigating rate exposure .

What Went Well and What Went Wrong

What Went Well

  • Property-level performance: “an increase of $1.2 million, or $0.08 per diluted share, resulting from an aggregate net increase in the income generated at various properties” supported YoY EPS growth .
  • FFO improvement: Q4 FFO of $11.8 million ($0.85/share) rose from $11.4 million ($0.82/share) in Q4 2023 on higher adjusted net income and lower depreciation/amortization .
  • Cost tailwinds at Chicago asset benefited full year: 2024 included a $610,000 property tax reduction and no demolition expenses (versus $1.1 million in 2023), lifting annual results .

What Went Wrong

  • Higher interest expense: “a decrease of $337,000, or $0.02 per diluted share, resulting from an increase in interest expense” pressured Q4 earnings; full-year interest expense rose $1.9 million .
  • Vacancy drag: The Trust “continues to market vacant properties located in Chicago, Illinois and Evansville, Indiana,” implying ongoing carrying costs until leased/sold .
  • Leasing still ramping: Sierra Medical Plaza I remains 68% leased (with a master flex lease covering 34%), keeping some near-term lease-up risk and deferred income realization .

Financial Results

Reported vs Prior Periods (Quarterly)

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Total Revenues ($USD Thousands)$24,320 $24,734 $24,494 $24,642
Diluted EPS ($USD)$0.26 $0.38 $0.29 $0.34
Adjusted Net Income per Diluted Share ($USD)$0.28 $0.38 $0.29 $0.34
FFO per Diluted Share ($USD)$0.82 $0.90 $0.82 $0.85
Depreciation & Amortization ($USD Thousands)$7,254 $6,806 $7,009 $6,797
Interest Expense, net ($USD Thousands)$4,584 $4,580 $4,793 $4,921
Weighted Avg Shares – Diluted (Millions)13.823 13.832 13.849 13.850

Revenue Breakdown (Quarterly)

Component ($USD Thousands)Q4 2023Q2 2024Q3 2024Q4 2024
Lease Revenue – UHS Facilities$8,326 $8,454 $8,248 $8,261
Lease Revenue – Non-related Parties$14,038 $14,359 $14,342 $14,472
Other Revenue – UHS Facilities$216 $220 $242 $220
Other Revenue – Non-related Parties$378 $342 $305 $334
Interest Income on Financing Leases – UHS$1,362 $1,359 $1,357 $1,355
Total Revenues$24,320 $24,734 $24,494 $24,642

KPIs and Capital Updates

KPIQ4 2023Q3 2024Q4 2024
FFO ($USD Thousands)$11,384 $11,317 $11,758
Dividend per Share ($USD)$0.725 $0.730 $0.735
Revolving Credit Facility Borrowings ($USD Millions)$326.6 $347.8 $348.9
Available Borrowing Capacity ($USD Millions)N/A$77.2 $76.1
Interest Rate Swap Notional ($USD Millions)N/AN/A$85.0 at 3.2725% fixed

Reported vs Consensus (Q4 2024)

MetricConsensusReported
Revenue ($USD Thousands)Unavailable (S&P Global access limit)$24,642
Diluted EPS ($USD)Unavailable (S&P Global access limit)$0.34
Note: S&P Global consensus estimates were unavailable at time of analysis due to access limits.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Share ($USD)Q4 2024$0.730 (Q3 dividend) $0.735 (declared Nov 25, 2024; paid Dec 31, 2024) Raised
Revolving Credit Facility Capacity ($USD Millions)Effective Sept 30, 2024$375 $425 (maturity extended to Sept 30, 2028) Raised/Extended
Management did not provide quantitative guidance for revenue, margins, FFO, OpEx, or tax rate in Q4 materials .

Earnings Call Themes & Trends

No UHT earnings call transcript was available; the Trust furnished results via press release and 8‑K (Item 2.02) . Themes below reflect press releases across quarters.

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Interest ExpenseIncreased due to higher average rate and borrowings Continued increase; headwind to EPS Further increase; −$337k EPS impact YoY Worsening headwind
Property-Level IncomeAggregate net increases drove EPS/FFO up Continued net increases +$1.2m benefit YoY Positive/Improving
Chicago Asset Costs2023 demolition costs; 2024 property tax reduction Demolition costs completed (2023) $610k property tax reduction in 2024; no 2023 demo costs Improving cost profile
Leasing – Sierra Medical Plaza I68% leased; master flex lease 34% 68% leased; details reiterated 68% leased; ~$35m aggregate cost; ~$30m incurred Stable, lease-up ongoing
Vacant Properties (Chicago, Evansville)Continuing to market Continuing to market Continuing to market; carrying costs persist Ongoing overhang
Capital Structure (Revolver & Swaps)Revolver capacity increased to $425m (9/30/24) New $85m swap at 3.2725% (10/2/24) Revolver $348.9m drawn; $76.1m capacity; swap in place Improved flexibility

Management Commentary

  • “The increase in our adjusted net income of $836,000, or $0.06 per diluted share… consisted of… an aggregate net increase in the income generated at various properties, partially offset by… an increase in interest expense” .
  • “Our FFO were $11.8 million, or $0.85 per diluted share… The increase… was due primarily to the above-mentioned increase in our adjusted net income… partially offset by a decrease in depreciation and amortization expense” .
  • “At December 31, 2024, we had $348.9 million of borrowings outstanding… and $76.1 million of available borrowing capacity… In October, 2024, we entered into an interest rate swap… $85 million with a fixed interest rate of 3.2725%… scheduled to mature on September 30, 2028” .
  • “We continue to market the vacant properties located in Chicago, Illinois and Evansville, Indiana” .

Q&A Highlights

  • No public UHT earnings call transcript was available; results were provided via press release and 8‑K (Item 2.02). No Q&A disclosures for Q4 2024 .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 EPS and revenue were unavailable at time of analysis due to access limits; as such, we cannot quantify beats/misses versus Street expectations at this time. The Trust’s reported Q4 diluted EPS was $0.34 and revenue was $24.642 million .
  • Given higher interest expense and steady property-level income growth, analysts may reassess interest cost assumptions and lease-up cadence, but specific revisions cannot be inferred without consensus data.

Key Takeaways for Investors

  • Earnings quality: YoY EPS and FFO/share improved on stronger property-level income despite rate-driven interest expense pressure; sequential revenue was broadly stable through 2H24 .
  • Yield signal: The $0.735 Q4 dividend (raised by $0.005) underscores commitment to distributions, a supportive factor for income-focused holders .
  • Balance sheet and hedging: Expanded revolver ($425m, extended to 2028) and a new $85m interest rate swap at 3.2725% fixed enhance liquidity and reduce rate volatility across the borrowing base .
  • Ongoing headwinds: Elevated interest expense remains a core drag on net income; monitoring SOFR and refinancing trajectory is critical for 2025 FFO/EPS sensitivity .
  • Operational catalysts: Lease-up at Sierra Medical Plaza I (currently 68% leased) and progress marketing vacant assets in Chicago/Evansville could add income and reduce carrying costs over time .
  • Full-year momentum: 2024 adjusted net income increased by $3.6 million ($0.26/share), aided by property tax reductions and elimination of demolition expenses year over year, indicating improving operating leverage .
  • Near-term watch items: Track quarterly leasing, bonus rent variability (e.g., McAllen Medical Center), and any shifts in tenant health system performance that may influence rent coverage and renewals .