Realty Income Corp. (O), Wednesday lowered its funds from operation forecast for the full-year 2011, due mainly to the impact of bankruptcy filing by one of its tenants. As well, the real-estate investment trust provided its guidance for the full-year 2012.
On October 5, Friendly's Ice Cream, one of Realty Income's tenants, filed for bankruptcy under Chapter 11 Federal Bankruptcy Laws. In its filing, Friendly's rejected the leases on 15 of the 121 properties with Realty Income, representing about $1.3 million in annualized rent.
Looking forward to fiscal year 2011, Realty Income now expects Funds From Operations, or FFO, in a range of $1.97 to $1.98 per share, compared to the previous estimate of $1.98 to $2.02 per share.
The company now expects adjusted FFO for the full-year 2011 in a range of $2.01 to $2.02 per share, down from the prior estimate of $2.03 to $2.05 per share.
On average, 13 analysts polled by Thomson Reuters currently expect FFO of $2.00 per share for fiscal year 2011. Analysts' estimates typically exclude unusual gains and losses.
For the full year 2011, Realty Income raised its net income guidance range to $1.13 - $1.14 per share from the previous estimate of $1.10 - $1.14 per share.
For the fiscal year 2012, the company currently expects FFO in range from $2.07 to $2.11 per share. The company estimates fiscal year 2012 adjusted FFO in a range of $2.11 to $2.16 per share.
Analysts currently expect FFO of $2.14 per share for fiscal year 2012.
Net income is expected in a range of $1.17 to $1.21 per share for the full-year 2012.
Realty Income also indicated investments of nearly $462 million in 89 properties during the third quarter.
Commenting on the investments, Chief Executive Tom Lewis said, "This brings our total completed acquisitions during the first three quarters of 2011 to $826 million. These immediately accretive acquisitions will further diversify our property portfolio and will provide us with increased lease revenue from which to pay monthly dividends."
Realty Income said it anticipates real estate portfolio acquisitions to exceed $850 million during 2011. Previously, the company expected acquisition volume of $600 to $800 million for the year.
O is currently trading on the NYSE at $30.60, down $0.94 or 2.96%, on a volume of 0.9 million shares.
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