Simon Property Group Inc. (SPG), Friday reported a 2% increase in funds from operations for the first quarter from a year ago, helped by stable performance of franchise retail assets within its regional mall, premium outlet and mills platforms. FFO for the quarter came in ahead of analysts' consensus estimate, as did revenues. Looking ahead, the company raised its earnings outlook for 2009. The company also declared a quarterly cash dividend.
The Indianapolis, Indiana-based company reported funds from operations or FFO for the quarter that increased 2.0% to $473.07 million or $1.38 per share from $463.90 million or $1.61 per share in the same quarter last year.
On average, eighteen analysts polled by Thomson Reuters expected the company to earn $1.33 per share for the quarter. Analysts estimates typically exclude special items.
FFO for the recent quarter reflects dilution of $0.08 per share as a result of the 2009 common stock issuances of 17.25 million shares of common stock by the company in March and an additional 23 million shares in May of 2009, as well as about 10 million shares year-to-date that were issued as common stock dividends.
Simon Property's net income attributable to common stockholders for the third quarter was $105.5 million or $0.38 per share, compared to $112.8 million or $0.50 per share in the year-ago quarter. Net income for the third quarter of 2009 reflects dilution of $0.23 per share as a result of the additional share issuance.
Revenues for the quarter decreased to $924.93 million from $935.59 million in the prior-year quarter. Nine analysts had a revenue consensus of $891.99 million for the third quarter.
In the immediately preceding quarter, Simon Property's FFO increased to $476.8 million or $1.61 per share, while net income available to common stockholders climbed to $106.8 million or $0.45 per share compared to last year, helped by the stable performance of franchise retail assets within its regional mall, premium outlet and mills platforms.
Amongst others in the sector, real estate investment trust,Taubman Centers Inc.(TCO) reported a loss of $94.07 million or $1.77 per share for the third quarter of 2009, compared to profit a year ago, hurt primarily by lower revenue that totaled $163.20 million. FFO applicable to the company was a negative $67.01 million or $1.26 per share, compared with FFO of $39.76 million or $0.74 per share in the year-ago period. On adjusted basis, FFO attributable to the company increased to $40.40 million or $0.74 per share from $39.76 million or $0.00 per share in the same quarter last year.
Another competitor, the Boston, Massachusetts-based Boston Properties Inc.'s (BXP) third quarter FFO increased to $158.5 million from last year, helped by higher revenues totaling $359.4, a 6% increase year-over-year, and lower expenses. The company's net income available to common shareholders rose to $65.8 million or $0.47 per share from $43.1 million or $0.35 per share in the previous year quarter.
Simon Property, the largest U.S. mall owner by number of properties, said it recovered $745 thousand of provision for credit losses for the quarter under review, compared to the provision for loan loss of $4.00 million in the same period last year. Total operating expenses for the quarter were $532.76 million, up from $552.24 million in the year-ago quarter.
For the nine-month period, net income attributable to common stockholders dropped to $191.56 million or $0.73 per share from $277.31 million or $1.23 per share in the same period last year.
FFO for the year-to-date declined to $1.26 billion or $3.92 per share from $1.31 billion or $4.56 per share in the year-ago period.
Total revenue for the period was $2.75 billion, essentially flat with the previous year.
The company declared a quarterly common stock dividend of $0.60 per share, consisting of a combination of cash and shares of the company's common stock. The cash component of the dividend will not exceed 20% in the aggregate, or $0.12 per share. The dividend is payable on December 18, 2009 to stockholders of record on November 16, 2009.
In addition, the company also declared dividends on its two outstanding public issues of preferred stock, 6% Series I Convertible Perpetual Preferred (SPGPrI) dividend of $0.75 per share is payable on November 30, 2009 to stockholders of record on November 16, 2009. The company also declared dividends on 8 3/8% Series J Cumulative Redeemable Preferred (SPGPrJ) dividend of $1.046875 per share is payable on December 31, 2009 to stockholders of record on December 17, 2009
Looking ahead to fiscal 2009, the company now expects net income will be within a range of $1.17 - $1.27 per share. Earlier, the company expected net income to be in the range of $1.05 - $1.20 per share.
Simon Property raised the low-end of its guidance for 2009 provided earlier in August, and expects FFO to be within a range of $5.40 to $5.50 per share for the year.
Analysts currently expect the company to report earnings of $5.43 per share for fiscal 2009.
SPG is currently trading at $66.89, down $1.28 or 1.88%, on a volume of 1.69 million shares on the NYSE. In the past 52 weeks, the stock trended in a broad range of $24.27 - $76.05, with a three-month average volume of 4.14 million shares.
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