COPT Defense Properties (NYSE:CDP) Tops Q3 2025 Estimates and Raises Guidance

COPT Defense Properties (NYSE:CDP) reported financial results for the third quarter of 2025 that surpassed analyst expectations on key profitability metrics, leading management to raise its full-year guidance. The performance underscores the resilience of the company's specialized Defense/IT portfolio, which is concentrated near key U.S. government defense installations.

Earnings and Revenue Performance Versus Estimates

The real estate investment trust posted funds from operations (FFO) per share of $0.69 for the quarter, a figure that significantly exceeded the analyst consensus estimate of $0.35. This result also represents an increase from the $0.65 per share reported in the same quarter last year.

On the top line, the company reported total revenue of $188.8 million, which narrowly beat analyst estimates of $188.1 million. The company's core lease revenue showed healthy growth, coming in at $178.3 million compared to $170.5 million in the prior-year period.

The key financial results versus expectations are summarized below:

• FFO Per Share: Reported $0.69 vs. Estimated $0.35
• Total Revenue: Reported $188.8M vs. Estimated $188.1M
• Diluted EPS: Reported $0.37, up from $0.32 in Q3 2024

Market Reaction and Updated Guidance

The market's immediate reaction to the earnings beat appears muted in after-hours trading, with no significant price movement initially observed. This could be due to the stock's recent performance, which has seen a decline over the past month. However, the company's forward-looking statements provided a bullish counterpoint.

Management raised the midpoint of its full-year 2025 FFO per share guidance to $2.70, implying a 5.1% year-over-year growth. This revised outlook is notably higher than the current analyst estimate for full-year revenue. The company also increased its projections for several operational key performance indicators:

• Same property cash NOI growth midpoint raised to 4.0%
• Year-end same property occupancy midpoint raised to 94.2%
• Vacancy leasing target increased by 11% to 500,000 square feet

Operational and Strategic Highlights

The press release detailed a quarter of strong operational execution and strategic capital allocation. President and CEO Stephen E. Budorick attributed the success to the company's Defense/IT investment strategy, which continues to generate excellent results.

Portfolio performance remained robust, with the Defense/IT Portfolio 97.0% leased and the total portfolio 95.7% leased. The company also demonstrated strong leasing momentum, executing 971,000 square feet of total leasing during the quarter with a tenant retention rate of 81.8%.

Strategic investments continued during the period, with the company committing $72 million to two new investments that expand relationships with existing Defense/IT tenants. These include a build-to-suit development in Huntsville and the acquisition of a fully-leased office building in the supply-constrained Westfields submarket of Chantilly, Virginia.

From a balance sheet perspective, COPT Defense strengthened its liquidity position by successfully closing on three financings in October that pre-fund a 2026 bond maturity and provide $400 million of additional capital for external growth opportunities.

For a detailed look at historical earnings, future estimates, and additional financial metrics, you can review the earnings and estimates data for COPT Defense Properties.

Disclaimer: This article is for informational purposes only and does not constitute investment advice of any kind.