Digital Realty Trust Inc. (DLR), Thursday reported a higher profit for the third quarter, helped mainly by a significant increase in rental revenues. Looking ahead, the company revised its fiscal 2009 funds from operations outlook.
San Francisco, California-based Digital Realty reported third quarter funds from operations or FFO available to common stockholders of $74.71 million, compared with $61.99 million reported last year. On a per share basis, FFO increased to $0.74 from $0.68 last year.
On average, 12 analysts polled by Thomson Reuters had anticipated FFO of $0.72 per share for the period. Analysts' estimates typically exclude one-time items.
Though there were no special items impacting FFO or net income in the quarter, year-ago FFO enjoyed additions from certain items, excluding which, FFO would have been $0.62 per share and unit. "This represents an FFO increase of 19.4% over the same period last year", noted the company.
Net income available to common stockholders for the quarter was $12.4 million or $0.16 per share, up from $7.5 million or $0.10 per share in the prior year quarter. Third quarter results largely benefited from the boost in total operating revenues for the quarter to $163.23 million, up from $142.02 million last year, ahead of Wall street expectations of $161.70 million.
Rental revenues contributed the bulk of top-line increments at $130.87 million, compared with $102.45 million last year.
The recently commenced leases on 101,000 square feet during the third quarter at an average annualized GAAP rent of approximately $170 per square foot, added credible rental revenues, according to the company.
Operating expenses were higher at $117.57 million compared to $108.36 million for the quarter.
For the nine months, FFO increased to $209.78 million or $2.14 per share, from $159.59 million or $1.84 per share year-ago. Net income was higher at $32.97 million 43 cents per share, than $12.89 million or 19 cents per share a year earlier. Revenues also increased to $467.37 million from $380.34 million in the same period of 2008.
Looking ahead to the full year 2009, the company expects FFO between $2.88 and $2.90 per share, compared to the previous guidance between $2.80 and $2.90 per share. Net income available to common stockholders is expected to be in the range of $0.58 - $0.60 per share.
Analysts currently anticipate the company to earn $2.89 per share for the full year.
Michael Foust, chief executive officer, added optimistically, "We expect income producing acquisitions will take a larger role in our investment strategy, contributing external earnings growth to complement internal growth from our ongoing development and leasing activities."
DLR is currently trading at $45.21, up by 64 cents or 1.44% on the New York Stock Exchange.
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