Simon Property FFO Rises; Lifts FY12 View, Dividend

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7/24/2012 1:47 PM ET

Simon Property Group Inc. (SPG: Quote) Tuesday reported an increase in funds from operations for the second quarter that also topped estimates, as rent, sales and occupancy at its malls and shopping centers improved. Simon Property's second-quarter profit also improved from a year ago, with revenues also recording a growth.

Moving ahead, the company lifted its full-year 2012 guidance and also boosted its quarterly dividend.

Simon Property, which is the largest owner of shopping malls and outlet centers in the U.S., has benefited by the increase in number of stores being launched by almost all retailers at malls and shopping centers boosting the demand for space.

U.S occupancy for the quarter improved 60 basis points to 94.2 percent, while total sales rose 9.9 percent to $554 per square feet. Base minimum rent increased to $39.99 per square feet from $38.57 square feet last year. Simon Property's revenues for second quarter grew to $1.19 billion from $1.04 billion last year. Analysts estimated revenues of $1.16 billion for the quarter.

Second-quarter funds from operations improved to $688.8 million or $1.89 per share from $583 million or $1.65 per share last year. Analysts polled by Thomson Reuters expected FFO of $1.81 per share for the quarter. Analysts' estimates typically exclude special items.

FFO, or funds from operations, is a performance measure for real estate investment companies ability to generate cash, excluding the gains or losses from property sales and depreciation.

Net income increased to $215.4 million or $0.71 per share from $205.1 million or $0.70 per share in the same quarter a year earlier.

Going ahead, the company raised its full year FFO guidance to a range of $7.60 to $7.70 per share from prior estimate of $7.50 to 7.60 per share. Analysts currently expect FFO of $7.63 per share.

Simon Property also declared a quarterly dividend of $1.05 per share, an increase of 5 percent from the previous quarter and 31.3 percent from last year. The dividend is payable on August 31 to stockholders of record on August 17.

SPG shares are currently trading on the NYSE at $157.18, up $1.24 or 0.80%, on a volume of 0.7 million shares.

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by RTT Staff Writer

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