American Assets Trust Inc (NYSE:AAT) reported its fourth-quarter and full-year 2025 financial results, delivering a significant earnings beat against analyst expectations while revenue came in slightly below estimates. The market's initial reaction appears muted, with the stock showing little movement in after-hours trading following the release.
Earnings and Revenue Versus Estimates
The real estate investment trust's performance for the quarter ending December 31, 2025, presented a mixed picture relative to Wall Street forecasts. The company reported funds from operations (FFO) per diluted share of $0.47, a key profitability metric for REITs. This figure substantially exceeded the analyst consensus estimate of $0.0808.
However, the company's top-line result did not meet expectations. Reported revenue for the quarter was $110.09 million, falling short of the estimated $113.72 million.
The full-year results showed a similar pattern of strong FFO relative to earnings per share but a year-over-year decline. Full-year 2025 FFO was $2.00 per diluted share, down from $2.58 per share in 2024. The company noted this decrease was primarily due to significant one-time items in the prior year, including $11.7 million in lease termination fees and $10.0 million in litigation income. Excluding these items, FFO for 2025 was $1.97 per share compared to $2.30 per share in 2024.
Market Reaction and Price Action
The immediate market reaction to the earnings release has been neutral. In after-market trading, the stock showed no significant price change. This tepid response suggests investors may be balancing the strong FFO beat against the revenue miss and the year-over-year decline in profitability, even when adjusted for one-time items.
Recent stock performance provides additional context:
- The stock is up approximately 0.17% over the past week.
- It is up 0.11% over the past two weeks.
- It has declined 2.38% over the past month.
The lack of a strong positive move post-earnings indicates the market may have anticipated the results or is focusing on the company's forward guidance and underlying operational trends.
Key Highlights from the Earnings Release
Beyond the headline numbers, the press release detailed several important operational and financial metrics:
- Leasing Activity: The company leased 193,000 square feet of office space in Q4, with comparable leases seeing an average cash-basis rent increase of 6.6%. Retail leasing of 43,000 square feet showed a modest 0.3% cash-basis increase on comparable space.
- Portfolio Occupancy: Occupancy rates showed stability in retail (97.7%) and multifamily (93.7%), while office occupancy stood at 83.1% for the total portfolio. The same-store office occupancy was higher at 85.6%.
- Same-Store Performance: Same-store cash net operating income (NOI) remained flat for the quarter and increased 0.5% for the full year compared to 2024.
- Balance Sheet & Liquidity: The company maintained a strong liquidity position of $529.4 million, comprising cash and availability on its revolving credit facility. Only one of its 31 properties is encumbered by a mortgage.
- Dividend: A quarterly dividend of $0.34 per share was declared for Q1 2026, consistent with the previous quarter.
Forward Guidance and Analyst Estimates
American Assets Trust provided initial guidance for 2026, projecting FFO per diluted share in a range of $1.96 to $2.10, with a midpoint of $2.03. This outlook can be compared to broader analyst expectations for the coming year.
Analyst estimates for the company's performance in 2026 include:
- Estimated EPS for Q1 2026: $0.1111
- Estimated Sales for Q1 2026: $117.24 million
- Estimated EPS for Full-Year 2026: $0.4343
- Estimated Sales for Full-Year 2026: $459.18 million
It is important to note that the company's FFO guidance and analyst EPS estimates are not directly comparable, as FFO is the standard profitability measure for REITs and treats real estate depreciation differently than GAAP earnings. Management will provide further detail on its assumptions during its earnings conference call.
For a detailed breakdown of historical earnings, future estimates, and analyst projections, you can view the earnings and estimates page for American Assets Trust Inc (NYSE:AAT).
Disclaimer: This article is for informational purposes only and does not constitute investment advice, an endorsement, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
