Friday, real estate investment firm Sun Communities Inc. (SUI), reported an increase in Funds From Operations for the third quarter, as well as a net loss that narrowed from last year on increased revenues, hurt partially by higher expenses. Looking ahead, the company affirmed its previous guidance for the full year 2009.
Southfield, Michigan-based Sun said its third-quarter FFO increased to $12.48 million or $0.60 per share from $11.32 million or $0.55 per share in the prior year period.
The company said results for the quarter included equity losses from its affiliate Origen Inc., severance charges, and flood damages at one property near Atlanta, Georgia. Excluding one-time items, adjusted funds from operations rose to $14.12 million or $0.68 per share from $12.82 million or $0.62 per share in the year-ago period.
On average, 3 analysts polled by Thomson Reuters expected the company to report earnings of $0.68 per share for the quarter.
Third quarter net loss attributable to the company narrowed to $2.03 million or $0.11 per share from $5.49 million or $0.30 per share in the previous year.
The company's loss from continuing operations for the quarter narrowed to $2.74 million from $4.5 million last year.
Total revenue for the quarter grew to $63.39 million from $61.25 million in the comparable period of 2008.
Revenues included income from real property of $48.6 million, compared to $47.79 million last year, Revenue from home sales improved to $8.43 million from $7.93 million last year.
During the quarter, the company sold 293 new and pre-owned homes, bringing the total year-to-date home sales to 811, an increase of 9.3% from the 742 homes sold during the first nine months of 2008.
"Gross margins on home sales are increasing year over year on new, pre-owned and rental home conversion sales. The increases are being seen in all areas of the country including the Midwest", noted the company.
Total expenses rose to $65.17 million from $64.12 million, led by a $0.8 million higher charge in property maintenance. Equity losses related to the affiliate were lower at $0.85 million, compared to $1.49 million year-ago.
For the nine months ended September 30, Sun's FFO rose to $41.3 million or $1.99 per share, from $27.13 million or $1.32 per share last year. Adjusted FFO was $43.28 million or $2.08 per share, compared with $42.07 million or $2.05 per share a year ago.
Year-to-date net loss attributable to the company was $3.42 million or $0.19 per share, compared to $15.96 million or $0.88 per share in the prior-year. Revenues for the nine-month period was marginally higher at $191.95 million when compared to $191.29 million in the same period of 2008.
The company added "Except for rain and reserves, we are happy with our third quarter results which allow us to affirm guidance for the year." Sun expects FFO of $2.84 - $2.92 per share for the full year, while the Street estimates FFO of $2.84 per share for the period.
SUI lost 0.94% or 17 cents, currently at $17.98 on the NYSE.
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