Summary
Digital Realty Trust, Inc. (DLR) reported its third-quarter 2016 results, showcasing robust growth driven by strategic acquisitions and development activities. The company continues to expand its global data center footprint, with a significant increase in operating properties and rentable square footage. Revenue growth was primarily fueled by the recent Telx and Europe Portfolio acquisitions, alongside new leasing in stabilized properties and recently completed development spaces. While stabilized rental revenues remained relatively flat year-over-year, this was offset by strong growth in interconnection and other revenues. The company maintained a strong balance sheet with a healthy debt-to-enterprise value ratio, indicating prudent financial management. Management highlighted a strategic focus on investing in and developing high-quality, well-located data centers to capitalize on the expected continued growth in corporate data center adoption. The company is actively managing its portfolio, leasing existing assets, and building out its development pipeline to meet anticipated demand. Despite a dynamic market influenced by economic conditions and foreign currency fluctuations, Digital Realty Trust remains committed to maximizing long-term growth in earnings and shareholder returns through its core data center business.
Financial Highlights
31 data points| Revenue | $546.29M |
| Operating Expenses | $430.54M |
| Operating Income | $115.75M |
| Interest Expense | $63.08M |
| Net Income | $219.19M |
| EPS (Basic) | $1.27 |
| EPS (Diluted) | $1.25 |
| Shares Outstanding (Basic) | 147.40M |
| Shares Outstanding (Diluted) | 149.38M |
Key Highlights
- 1Total operating revenues increased by $110.3 million to $546.3 million for the third quarter of 2016 compared to the prior year period, largely driven by acquisitions and interconnection services.
- 2The company completed significant acquisitions, including the Europe Portfolio Acquisition for $818.9 million and other land parcels for $47.6 million, expanding its global reach.
- 3Digital Realty Trust reported a strong portfolio occupancy rate of 89.9% (excluding space under development) as of September 30, 2016, indicating healthy demand for its facilities.
- 4The company recognized a significant gain on sale of properties totaling $170.1 million for the nine months ended September 30, 2016, primarily from the sale of the Paris property and a four-property portfolio.
- 5Interest expense increased by $14.9 million in Q3 2016 compared to Q3 2015, mainly due to the issuance of new notes in late 2015 and early 2016 to fund acquisitions and development.
- 6As of September 30, 2016, the company had approximately $1.9 billion available under its $2.0 billion global revolving credit facility, providing significant liquidity.
- 7The debt to total enterprise value ratio was approximately 27% as of September 30, 2016, indicating a strong financial position and capacity for further growth.