Commercial and residential properties developer Forest City Enterprises, Inc. (FCE-A, FCE-B) reported a net loss for the third quarter that widened from a year ago on charges and higher write-offs of abandoned development projects in addition to year-ago gains from the sale of the majority of the company's supported-living portfolio. In order to bolster its liquidity, the company said its board of directors voted to suspend quarterly dividends to the company's Class A and Class B common stock.
The company's net loss for the third quarter widened to $18.53 million, or $0.18 per share, from $10.77 million, or $0.11 per share, in the same period last year. On average, three analysts polled by First Call/Thomson Financial expected the company to report a loss of $0.11 per share.
Total revenues for the quarter were $334.53 million, up 0.3% from $333.63 million in the prior-year quarter Analysts had a consensus revenue estimate for the quarter of $366.77 million.
Revenues for the latest quarter were impacted by decline in revenue from land and outlot sales that offset increases from the rental properties portfolio.
The company's earnings before depreciation, amortization and deferred taxes, or EBDT, declined to $44.1 million, or $0.42 per share, from $68.8 million, or $0.64 per share a year ago.
Increases in pre-tax EBDT for the quarter was offset by a charge of $12.4 million pre-tax for an uncollectible obligation from Lehman Brothers Inc. related to the company's Stapleton project, and increased write-offs of abandoned development projects of $8.7 million pre-tax. The year-ago period's results include a gain of $7.7 million pre-tax on the sale of the Sterling Glen of Roslyn development project, with no corresponding gain in 2008.
Loss from continuing operations for the latest quarter widened to $18.53 million, or $0.18 per share, from $11.41 million, or $0.11 per share, a year ago.
Operating loss for the quarter, a non-GAAP financial measure, widened to $25.69 million from $5.50 million a year ago.
For the nine months, the company's net loss was
$67.12 million, or $0.65 per share, compared with net earnings of $39.82 million, or $0.38 per share, a year ago.
Loss from continuing operations for the period widened to $72.48 million, or $0.70 per share, from $24.89 million, or $0.24 per share, in the prior-year period.
Total revenues for the nine-month period increased 9.3% to $972.42 million from $889.58 million in the same period last year.
Operating loss for the period widened to $84.31 million from $24.96 million in the prior-year period.
In response to the ongoing turmoil in the markets, the company said it has adopted a comprehensive strategy to sustain and transform its business. Accordingly, the company has significantly slowed nearly all longer-term development and implemented cost-cutting measures that include workforce reductions.
The company said it will actively pursue selective asset sales and joint ventures as well as proactively manage debt maturities with a continued commitment to nonrecourse financing. In addition, the company plans to selectively take advantage of opportunities created by market dislocations.
In order to bolster liquidity, the company said its board of directors has voted to suspend quarterly cash dividends on the company's Class A and Class B common stock, effective following the dividend payable on December 15, 2008. The board will reevaluate the decision to suspend dividends when economic and market conditions improve.
FCE-A closed Monday's regular trading session at $9.18, up $0.47 or 5.40% on a volume of 1.57 million shares.
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