UHT Posts Q2 Profit and FFO Decline
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What the data shows is Universal Health Realty Income Trust (UHT -0. 63%), a real estate investment trust (REIT) that owns and invests in healthcare-related facilities, reported its earnings for...
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July 28, 2025
08:06 PM
The Motley Fool
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What the data shows is Universal Health Realty Income Trust (UHT -0. 63%), a real estate investment trust (REIT) that owns and invests in healthcare-related facilities, reported its earnings for the second quarter of fiscal 2025 on July 28, 2025, in today's market environment
The most significant headline from this release was the year-over-year decline in both net income and FFO per (non-GAAP), driven by the absence of a prior-year perty tax benefit and higher interest costs
Nevertheless, Revenue increased slightly compared to the prior year (fascinating analysis)
At the same time, There was no published Wall Street consensus to compare these results to
Overall, this quarter showed stable but pressured financial performance, with portfolio diversification and a slight dividend increase (dividend paid per : $0
Nevertheless, 74, up from $0. 73 a year ago)
Additionally, MetricQ2 2025Q2 2024Y/Y ChangeEPS (GAAP, diluted)$0 (quite telling). 8%)Funds From Operations (FFO) per (Non-GAAP, diluted)$0. 6%)Revenue$24. 9 million$24, given the current landscape
Furthermore, 7 million0 (which is quite significant), in today's market environment. 8%Net Income$4. 5 million$5. 3 million(14. 8%)Dividend Paid per $0. 4% Universal Health Realty Income Trust: Model and Strategic PrioritiesUniversal Health Realty Income Trust is a healthcare-focused REIT with a portfolio that includes hospitals, medical office buildings (MOBs), behavioral health facilities, and other outpatient centers
However, It owns 76 perties distributed across 21 states, leasing to both related and third-party healthcare viders
A critical pillar for the is its longstanding relationship with Universal Health Services, Inc, in light of current trends. (UHS), which is both a major tenant and the external advisor to the REIT
Universal Health Realty Income Trust distributes at least 90% of its taxable income as dividends to maintain compliance with REIT
This analysis suggests that s key success factors include the ability to find and manage high-performing healthcare perties, navigate regulatory changes in healthcare reimbursement, and manage debt efficiently to tect earnings in a rising interest rate environment
Quarter in Review: Financial and Portfolio PerformanceResults showed a decline in net income (GAAP) to $4. 5 million and diluted earnings per to $0. 32, both down from the prior-year period, given current economic conditions
At the same time, The main causes for this drop in net income were a one-time perty tax reduction in Chicago that benefited the prior year's results, a $137,000 rise in interest expenses tied to increased borrowings, and a small decrease in overall income at select perties
Funds from operations (non-GAAP), a commonly used REIT metric that measures cash available for distribution before depreciation and other non-cash charges, also fell year over year to $0
On the other hand, Lease income from UHS facilities totaled $8. 4 million, almost unchanged from the prior year, while lease revenue from third-party tenants was $14 (something worth watching). 57 million (which is quite significant)
Furthermore, Apximately 40% of revenue came from UHS facilities for the year December 31, 2024, representing a steady portion for the company
Operating expenses saw upward pressure
Depreciation and amortization increased compared to the prior year
Meanwhile, Interest expense also ticked up as higher credit agreement balances led to greater borrowing costs
This leads to the conclusion that company the quarter with $354 (this bears monitoring). 8 million in credit facility borrowings and maintained $6. 6 million in cash
Furthermore, Real estate investments plus financing receivables totaled $499. 8 million as of June 30, 2025, a slight decline from the December 31, 2024 balance, in today's financial world
No major perty transactions, additions, or divestitures were disclosed
The company continues to express caution regarding the healthcare operating environment, with statements in the release emphasizing tenant risks tied to staffing shortages, government healthcare funding, and patient volumes (something worth watching)
This leads to the conclusion that se risks are material, as nearly 27% of the company's revenue in both 2024 and 2023 came from tenants highly reliant on federal and state grams Medicare and Medicaid (this bears monitoring), in this volatile climate
On the other hand, The dividend was $0
In contrast, 74 per, compared to $0. 73 per a year earlier
The evidence shows dividend represents a cautious increase despite flat or declining FFO per (non-GAAP)
The payout totaled $10, in light of current trends
Looking Ahead: Guidance and Priorities for the Coming QuartersManagement did not vide any financial guidance for revenue, net income, or FFO for either the upcoming quarter or the full fiscal year, in today's market environment
On the other hand, The company continues to highlight risks tied to interest rates, tenant financial health, and possible changes in government healthcare reimbursement, particularly for tenants relying on Medicaid or Medicare, amid market uncertainty
The release mentioned that any further increases in interest rates could impact future results by raising borrowing costs
This demonstrates that se include the pace of revenue diversification away from UHS, changes in tenant mix, portfolio occupancy, access to capital, cost of debt, and any new perty acquisition or sale activity
However, Revenue and net income presented using U
Generally accepted accounting principles (GAAP) unless otherwise noted, in today's financial world.
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