Bullish stock to watch: DIGITAL RLTY TR/SH (NYSE: DLR)

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DIGITAL RLTY TR/SH (NYSE: DLR) stock rose over 2.9% % on 14th Feb, 2020 (As of 10:25 am GMT-5; Source: Google finance) after the company posted mixed results for the fourth quarter of FY 19. In the fourth quarter, the company had signed total bookings of $69 million, included a $7 million contribution from interconnection. The company had signed new leases for space and power, totaling $62 million, with a weighted average lease term of a little over six years, including an $8 million colocation contribution. The current backlog of leases signed, but not yet started increased from $99 million as of September 30th, to a $116 million at year-end. The difference between signings and commencements during the fourth quarter was a bit better than the long-term historical average at four months. Further, the company has signed a $117 million of renewals during the fourth quarter in addition to new leases signed.

DLR in the fourth quarter of FY 19 has reported the adjusted funds from operations per share of $1.62, beating the analysts’ estimates for the adjusted funds from operations per share of $1.58. The core FFO per share has declined 3.6% year-over-year, mainly due to two months of dilution from the Mapletree joint venture. The company had reported the adjusted revenue growth of 1 percent to $787.5 million in the fourth quarter of FY 19, missing the analysts’ estimates for revenue of $794 million.

Meanwhile, the company has recently announced an agreement with Clise Properties for the acquisition of a 49% ownership interest in the Westin Building Exchange in Seattle. The Westin Building is one of the most densely interconnected facilities in North America. The Pro forma for the asset sales of Westin Building and the combination with Interxion, network dense performance sensitive assets will make up nearly half the company’s portfolio, up from a little over one-fourth as of September 30th.

On the other hand, in early January, the company had raised EUR1.7 billion of euro bonds with a weighted average maturity of approximately seven years and a weighted average coupon of approximately 1%. The company intends to use a portion of the net proceeds from these bonds to refinance Interxion’s outstanding debt.

Additionally, the company has received clearance from the antitrust authorities in Austria, Germany and the Netherlands and the company is now just waiting for decisions on the foreign investment filings in France, and Germany where the company currently own and operate data centers.

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