Regency Centers watching grocer bankruptcies; Fidelity earnings increase 51%

The Jacksonville-based shopping center company has one Earth Fare and three Lucky’s Market stores in its portfolio.


  • By Mark Basch
  • | 5:10 a.m. February 20, 2020
  • | 5 Free Articles Remaining!
Regency Centers CEO Lisa Palmer expects “muted growth” as major retailers continue to close stores.
Regency Centers CEO Lisa Palmer expects “muted growth” as major retailers continue to close stores.
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As major retailers continue to file for bankruptcy and close stores, shopping center developers like Regency Centers Corp. already have been managing a difficult environment for the past couple of years.

But Jacksonville-based Regency, which focuses on shopping centers anchored by supermarkets, might be facing new challenges in 2020. Recent Chapter 11 filings by specialty grocers Lucky’s Market and Earth Fare portend a shake-up in the industry as those chains close their stores.

However, Regency CEO Lisa Palmer says well-run grocery chains will weather the storm.

“We really want to make sure that we’re aligning ourselves with the better operators, with strong balance sheets and with the ability to reinvest back in their business,” Palmer said last week during Regency’s quarterly conference call with analysts.

“Certainly, smaller operators and especially those with higher leverage are facing more of an uphill battle, no question,” she said.

“It doesn’t mean that all regional, smaller grocers are not going to be able to survive and thrive in this environment. But they have to have the ability to reinvest back in the business in the in-store experience as well as technology, delivery and everything that’s happening in the world of grocery.”

Regency operated 419 properties across the country at year-end, many of them anchored by large chains such as Publix, which has 68 stores in Regency shopping centers.

The company listed one Earth Fare and three Lucky’s stores in its portfolio.

Regency’s properties were 94.8% leased at the end of 2019. 

The company recorded fourth-quarter funds from operations (earnings excluding noncash charges) of $1 a share, 2 cents higher than the fourth quarter of 2018, with same-property net operating income (NOI) growth of 1.9%.

“While we’re really proud of these accomplishments, we acknowledge that, disappointingly, we did not exceed expectations in 2019, both ours and yours, specifically for same-property NOI growth,” Palmer said.

“Leasing velocity in the first half of last year as well as store closures and bankruptcies drove us to the lower end of our same-property NOI growth range.”

With major retailers continuing to close stores, Regency is projecting earnings to be flat or slightly higher this year.

Palmer said those projections are “below our standards on both an absolute and relative basis” but she expects the “muted growth” to be temporary.

“As I look to 2021 and beyond, I’m confident that we will soon be meeting our objectives of 3% plus same-property NOI growth and 4% plus earnings growth,” she said.

Fidelity earnings increase 51%

Fidelity National Financial Inc. last week reported a big jump in fourth quarter earnings and revenue.

The Jacksonville-based title insurance company had adjusted earnings of 95 cents a share, up from 63 cents in the fourth quarter of 2018, with revenue rising almost 40% to $2.36 billion.

The earnings were 14 cents higher than the consensus forecast of analysts surveyed by Zacks Investment Research.

The report came a week after Fidelity announced a deal to acquire annuity and life insurance company FGL Holdings to diversify its business. 

Fidelity said FGL’s businesses tend to do well in interest rate environments that are negative for the title insurance business.

That could come in handy this year because Fidelity is expecting the title business to slow down.

“We expect mortgage originations to moderate through the year from the very strong levels enjoyed in 2019 as refinance volumes naturally ease,” Chairman Bill Foley said in a news release.

“We will remain vigilant on expenses as we manage this expected slowdown in volumes,” he said.

FIS projects 2020 earnings growth

Fidelity National Information Services Inc., or FIS, last week reported slightly lower fourth-quarter earnings. But the Jacksonville-based banking technology company is expecting its 2019 acquisition of payments technology company Worldpay Inc. to increase earnings this year.

FIS reported adjusted earnings of $1.57 a share, 3 cents lower than the previous year, in its first full quarter of operations since acquiring Worldpay. 

With the addition of Worldpay, revenue jumped 54% to $3.34 billion.

FIS officials said in the company’s conference call it is ahead of schedule in integrating Worldpay’s operations.

Chief Financial Officer Woody Woodall said FIS had been projecting the merger to be “mildly dilutive” for 2020 earnings but because of the integration progress, FIS now expects Worldpay to increase the company’s earnings.

FIS is projecting 2020 earnings of $6.17 to $6.35 a share, up from $5.61 in 2019.

Mixed forecast for Black Knight

Black Knight Inc. last week reported higher fourth-quarter earnings but gave a mixed forecast for its 2020 results.

The Jacksonville-based mortgage technology company had adjusted earnings of 54 cents a share, 4 cents higher than the previous year, and said revenue rose 5% to $300.1 million.

Black Knight is projecting 2020 adjusted earnings of $1.97 to $2.06 a share, compared with $1.99 in 2019.

In the company’s conference call, Chief Financial Officer Kirk Larsen said Black Knight expects earnings and revenue growth to be lower in the first half of the year due in part to the timing of implementation of some contracts. But it expects growth to accelerate in the second half of 2020.

Black Knight and FIS were spun off from Fidelity National Financial.

Staffing firm GEE Group reports loss

GEE Group Inc. last week reported a net loss of $3.6 million, or 27 cents a share, for its first quarter ended Dec. 31. Revenue fell 2.6% to $37.6 million.

Despite the loss, the Jacksonville-based staffing company said its operational improvement plan is having a positive effect on its financial performance.

“We have put in place an aggressive top and bottom line budget which we expect will have a very positive impact on revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization),” CEO Derek Dewan said in a news release.

ParkerVision sues Intel over patents

ParkerVision Inc., which has several patent infringement lawsuits pending against major communications device manufacturers, filed another lawsuit last week against processor maker Intel Corp.

The lawsuit, filed in Texas, alleges Intel is using patented technologies developed by Jacksonville-based ParkerVision in its products without authorization.

ParkerVision has other legal actions against major technology companies including Apple Inc., LG Electronics Inc. and Qualcomm Inc.

The company has no products on the market and is focused solely on patent infringement lawsuits.

CSX raises its dividend by 2 cents

CSX Corp. last week said its board of directors authorized an increase in its stock’s quarterly cash dividend from 24 cents a share to 26 cents.

This is the fifth time since 2015 the Jacksonville-based railroad company raised the quarterly dividend by 2 cents.

Duos Technologies trading on Nasdaq

Duos Technologies Group Inc.’s stock began trading on the Nasdaq Capital Market last week.

The Jacksonville-based company last month implemented a 1-for-14 reverse stock split to lift its stock price and qualify for the Nasdaq listing. 

The reverse split raised Duos’ stock price to about $7 in the days leading up to the new listing. 

However, as the company announced the move to Nasdaq, it also said a secondary offering of 1.35 million shares was priced at $6. So, the stock dropped to $6.05 on its first day of trading on Nasdaq on Feb. 13.

Duos had been trading on the OTCQX market. The stock is trading on Nasdaq with the same ticker symbol, “DUOT.”

 

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