Real estate investment firm Highwoods Properties Inc. (HIW) Wednesday reported higher funds from operations for the third quarter, but FFO per share declined, as offerings increased share counts year-on-year. In addition, the company narrowed and boosted the expected FFO per share for the full year 2009.
Funds from operations or FFO increased to $46.388 million from $44.584 million reported last year. On a per share basis, however, FFO decreased to $0.62 from $0.71 in the last year, attributable to the increase in the number of outstanding shares to 75.07 million from 63.23 million last year on equity offerings.
On average, 10 analysts polled by Thomson Reuters expected the company to report FFO of $0.60 per share for the quarter. Analysts' estimates typically exclude special items.
The Raleigh, North Carolina-based company reported that its third-quarter net income available for stockholders decreased to $10.28 million or $0.14 per share from $12.15 million or $0.21 per share in the prior-year period. Earnings for the year-ago third quarter included gains of $3.14 million on the disposition of depreciable properties.
Third-quarter rental and other revenues increased to $114.229 million from $112.755 million a year ago. Analysts expected revenue of $113.18 million for the quarter.
Operating expenses declined to $85.06 million from $81.24 million, while interest expenses declined favorably to $21.33 million from $24.49 million in the same quarter last year. Other income recorded was higher at $3.98 million compared with $1.01 million in the prior-year.
Income from continuing operations increased to $12.72 million from $10.98 million last year. Same property net operating income from continuing operations, excluding straight line rent and termination fee income, decreased 3.2% from the corresponding period of 2008.
For the nine months ended September 30, 2009, FFO was $143.3 million or $2.02 per share, compared with $130.3 million or $2.10 per share, one year ago. Net income available for common stockholders was $54.3 million or $0.81 per share compared with $37.1 million or $0.64 per share last year.
The company said it raised and narrowed its 2009 FFO guidance range to $2.59 - $2.62 per share from previous range of $2.52 -$2.60 per share. Analysts anticipate FFO of $2.59 per share for the full year 2009.
HIW lost 5.02% or $1.44 when it last traded at $27.23 on Wednesday's regular market session on the New York Stock Exchange, on 1.7 million shares.
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