What caused GMRE's EPS to drop in Q2 and Q3 2024?

Global Medical REIT (GMRE) experienced a drop in EPS in Q2 and Q3 of 2024 due to several factors: 1. **Revenue Shortfall**: In Q2, GMRE's revenue fell slightly short of expectations, with reported revenue of $34.21 million compared to analyst estimates of $35.24 million. This shortfall, although relatively small, would have had a direct impact on the EPS, especially when combined with other factors. 2. **Expense Management Issues**: GMRE faced challenges in managing its expenses, which adversely affected profitability. For instance, in Q3, the company's funds from operations (FFO) per share missed the Zacks Consensus Estimate. This suggests that operational expenses were higher than anticipated, squeezing profit margins and leading to a decrease in EPS. 3. **Lease-Up Costs and Vacancies**: GMRE has been undergoing a strategic shift with plans to re-lease certain facilities. The process of re-leasing properties can be costly, especially if there are vacancies or lease expirations, which can temporarily strain financial performance and impact EPS. In Q3, the company mentioned being optimistic about re-leasing a facility in Beaumont, Texas, but such activities can initially depress earnings due to the costs involved in preparing the property for lease. 4. **Interest and Debt Levels**: GMRE's leverage ratio stood at 44.0% as of Q1 2024, which is relatively high. High levels of debt can lead to higher interest expenses, which directly reduce net income and, consequently, EPS. If the company's debt levels were unchanged or increased during Q2 and Q3, this could have contributed to the observed EPS decline. In summary, GMRE's EPS drop in Q2 and Q3 2024 was likely a result of a combination of revenue shortfall, expense management issues, lease-up costs, and high debt levels.