Howard Hughes (HHH) Q2 2024 earnings summary

Executive summary

• Achieved net income of $21.1 million ($0.42 per diluted share) in Q2 2024, reversing a $19.1 million loss year-over-year, driven by record residential land sales and improved operating performance.

• Board approved and completed the spinoff of Seaport Entertainment, with SEG shares trading on NYSE American as of August 1, 2024, sharpening focus on core real estate businesses.

• Raised full-year guidance for Operating Assets NOI and condo sales, reflecting strong demand and execution across segments.

Financial highlights

• Q2 2024 revenues totaled $219.2 million, up from $201.2 million in Q2 2023; net income attributable to common stockholders was $21.1 million, compared to a loss of $19.1 million last year.

• Operating Assets NOI was $67.6 million, down 1% year-over-year due to prior-year lease termination fees; excluding these, NOI grew 5%.

• MPC EBT surged to $123.2 million, driven by a 315% increase in residential land sales at a record $1 million per acre.

• Cash and cash equivalents stood at $436.8 million as of June 30, 2024, with $1.2 billion in undrawn lender commitments.

• Debt totaled $5.5 billion as of June 30, 2024, with $2.1 billion in senior unsecured notes.

Outlook and guidance

• 2024 Operating Assets NOI guidance raised to $255 million at the midpoint, up $5 million from initial guidance.

• Condo sales revenue guidance increased to $730–$750 million, with gross margins of ~28%.

• MPC EBT guidance reaffirmed at a midpoint of $300 million, with record residential land sales expected.

• Cash G&A projected at $80–$90 million, excluding ~$30 million in spinoff costs and $8 million in non-cash stock compensation.

• Management expects continued growth in core MPC assets and stabilization of income-producing properties.