(RTTNews) - Wednesday, real estate investment trust Equity Residential (EQR: News ) reported a year-over-year decline in its third-quarter fund from operations or FFO, hurt by lower net operating income from its same store portfolio and dilution from its 2008 and 2009 transaction activity. Looking ahead, the company raised its fiscal 2009 guidance, besides issuing fourth quarter FFO forecast.

The Chicago, Illinois-based company reported FFO available to common shares and units for the third quarter of $154.44 million or $0.53 per share, down from $186.59 million, $0.64 per share in the corresponding period last year.

On average, twenty-one analysts polled by Thomson Reuters expected the company to earn $0.52 per share for the quarter. Analysts' estimates typically exclude special items.

The company attributed the lower FFO to a $0.06 per share negative impact from lower net operating income from its same store portfolio and a $0.05 per share negative impact of from dilution from the company's 2008 and 2009 transaction activity.

Third quarter net income available to common shares declined to $132.36 million or $0.48 per share, compared to $172.25 million or $0.63 per share in the year-ago quarter, with the decline primarily due to lower gains from property sales in 2009 and lower property NOI.

Income from continuing operations declined to $12.82 million from $26.09 million in the prior year period. Discontinued operations contributed $130.54 million to net earnings, compared to $161.03 million in the comparable period of fiscal year 2008.
Total revenues for the quarter decreased to $492.76 million from $511.01 million in the prior-year quarter. Eight analysts had a revenue consensus of $486.51 million for the third quarter.

On a same store third quarter to third quarter comparison, which includes 119,121 apartment units, revenues decreased 3.9%, expenses decreased 0.6% and NOI decreased 5.8%. The revenue decrease was due to a 3.2% decrease in average rental rates and a 0.7% decrease in occupancy to 93.7%.

In the preceding quarter, the company's second quarter FFO declined to $168.7 million or $0.58 per share from $185 million, $0.64 per share in the corresponding period last year. Net income available to common stock holders fell to $96.6 million or $0.35 per share from $126.6 million or $0.46 per share in the same period last year. Total revenues declined to $505.2 million from $513.3 million in the corresponding period last year.

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