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DuPont Fabros: Cheaper - For A Reason

DuPont Fabros Technology (DFT) announced earnings today that were disappointing. The release contained both positives and negatives, but was skewed to the negative, making me wary of an investment despite the nearly 8% drop in share price.

The negatives from the release (emphasis mine, my comments are preceded by an asterisk):

  • The midpoint of our 2015 Normalized FFO guidance range is $2.37, which is $0.02 lower than 2014's Normalized FFO of $2.39 per share.
  • The increase in provision for bad debts is related to the customer who restructured three of its leases with us in the first quarter of 2013. Since that restructuring, we have received all payments due from this customer through the end of 2014. This customer informed us in January 2015 that they would be halting base rent payments and would pay only operating expenses, direct electric charges and management fees until the company is sold or