Gramercy Capital Corp. (GKK), Thursday reported a slump in fourth quarter profit, primarily on higher depreciation expenses, notwithstanding a surge in quarterly revenues. FFO, however, jumped from the year ago quarter. Citing deepening economic crisis, Gramercy also deferred from providing earnings guidance. To retain capital for working capital purposes, the board also decided not to pay dividend for the fourth quarter. Gramercy currently gained more than 27%, on the New York Stock Exchange.
For the fourth quarter, Gramercy Capital's net income available to common stockholders decreased to $9.44 million or $0.18 per share from $23.20 million or $0.67 per share in the year ago quarter.
Funds from operations were $35.92 million, up 49% from the $24.05 million in the year-earlier quarter. On a per share basis, FFO was flat at $0.69.
Net income from continuing operations was $12.85 million or $0.20 per share, down from $25.65 million or $0.67 per share in the prior-year quarter. Net income dropped to $11.78 million from $25.54 million in the year-ago quarter.
The decline in profit was primarily attributed to depreciation expense of $25.4 million or $0.49 per share, compared to $1.0 million or $0.03 per share in the prior year quarter.
Gramercy Capital said it incurred charge-offs totaling $6.9 million in connection with a loan, sold at a loss. At quarter-end, five loans with an aggregate carrying value of $216.6 million were classified as sub-performing, as compared to six loans with an aggregate carrying value of $174.5 million at September 30, 2008.
Gramercy also recorded a gross provision for possible loan losses of $47.8 million for the quarter, relating to nine separate loans based on quarterly review of loan portfolio.
Total revenues for the quarter were $165.36 million, up from $84.85 million in the year ago quarter.
Analysts polled by Thomson Reuters expected the company to report a loss of $0.02 per share on revenues of $ 178.92 million for the quarter. Analysts' estimates typically exclude special items.
Total expenses were $154.83 million, up from $65.43 million in the same quarter a year ago. Net operating income increased to $122.36 million from $84.85 million in the year-earlier quarter.
For the full-year 2008, net income available to common shareholders plunged to $49.96 million or $1.06 per share from $155.03 million or $5.28 per share a year ago. FFO for the year was $123.50 million or $2.61 per share, up from $89.06 million or $3.03 per share a year earlier.
Net income for the year was $59.30 million and net income from continuing operations was $60.79 million or $1.09 per share for the full year.
Annual revenues jumped to $602.12 million from $315.45 million a year ago.
In 2009, the company is restricted from paying distributions on its common and preferred stock under the terms of its $150.0 million junior subordinated debenture.
GKK is currently trading at $0.89, up $0.19 or 27.14%, on a volume of 0.91 million shares.
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