American Assets Trust, Inc. :AAT-US: Earnings Analysis: Q1, 2016 By the Numbers

American Assets Trust, Inc. reports financial results for the quarter ended March 31, 2016.

We analyze the earnings along side the following peers of American Assets Trust, Inc. – Boston Properties, Inc. (BXP-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 70.73 million, Net Earnings of USD 7.65 million.
  • Gross margins narrowed from 43.25% to 39.86% compared to the same period last year, operating (EBITDA) margins now 39.80% from 39.57%.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2015-03-31 2015-06-30 2015-09-30 2015-12-31 2016-03-31
Relevant Numbers (Quarterly)
Revenues (mil) 65.34 66.07 70.59 70.81 70.73
Revenue Growth (%YOY) 3.13 7.46 5.92 6.52 8.26
Earnings (mil) 8.03 8.71 13.56 8.21 7.65
Earnings Growth (%YOY) 74.42 134.53 111.34 16.91 -4.68
Net Margin (%) 12.29 13.18 19.21 11.6 10.82
EPS 0.18 0.2 0.3 0.18 0.17
Return on Equity (%) 4.19 4.42 6.6 3.95 3.71
Return on Assets (%) 1.64 1.77 2.73 1.65 1.55

Access our Ratings and Scores for American Assets Trust, Inc.

Market Share Versus Profits

Revenues History
Earnings History

AAT-US‘s change in revenue this period compared to the same period last year of 8.26% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that AAT-US is holding onto its market share. Also, for comparison purposes, revenues changed by -0.11% and earnings by -6.83% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Earnings Growth Analysis

The company’s year-on-year earnings decline was driven by the drop in gross margins from 43.25% to 39.86%. This drop in earnings would have been worse were in not for operational cost control activities, which helped the operating margins (EBITDA margins) improve from 39.57% to 39.80%. For comparison purposes, gross margins were 39.27% and EBITDA margins were 38.70% in the previous period.

Gross Margin Versus EBITDA Margin

Margins

The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 17.52% to 15.12% and (2) one-time items that contributed to a decrease in pretax margins from 17.54% to 15.16%

EBIT Margin Versus PreTax Margin
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for American Assets Trust, Inc.

Company Profile

American Assets Trust, Inc. is a full service, vertically integrated and self-administered real estate investment trust. Its portfolio is comprised of retail shopping centers; office properties; a mixed-use property and a retail shopping center; and multifamily properties. The company operates through four segments: Retail, Office, Multifamily and Mixed-Use. The Retail segment primarily includes rental of retail space. The Office segment primarily includes rental of office space. The Multifamily segment includes rental of apartments. The Mixed-Use segment includes rental of retail space and other tenant services. American Assets Trust was founded on July 16, 2010 and is headquartered in San Diego, CA.

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