Tuesday, Sovran Self Storage Inc. (SSS), a self-storage real estate investment trust, reported a decline in fourth-quarter funds from operations or FFO and profit on higher interest expense. The company also provided FFO guidance for the first quarter and full year 2009.
The Williamsville, New York - based company reported fourth-quarter FFO available to common shareholders of $16.96 million or $0.78 per share, compared to $18.97 million or $0.88 per share in the same quarter last year.
Net income for the quarter was $8.37 million or $0.38 per share, compared to $10.74 million or $0.50 per share in the year ago quarter.
On average, six analysts polled by Thomson Reuters expected the company to earn $0.80 per share for the quarter. Analysts' estimates typically exclude special items.
The company said that during the fourth-quarter, costs associated with acquisitions that the company no longer intends to pursue were written off, which made a negative impact of $0.02 per share on the fourth-quarter FFO. Higher interest expense associated with the company's recent long-term financing and increased customer move-in incentives also played a significant role in the decline of fourth-quarter earnings.
Total operating revenues increased to $50.77 million from $49.85 million in the comparable quarter last year. Analysts expected the company to report revenue of $49.55 million for the quarter.
Total operating expenses increased to $31.95 million from $29.87 million in the prior year quarter. Interest expenses for the quarter increased to $10.13 million from $8.95 million in the same quarter last year. Income from operations declined to $18.82 million from $19.98 million in the prior year quarter.
For the full year, Sovran Self Storage reported FFO available to common shareholders of $70.84 million or $3.25 per share, compared to $71.30 million or $3.38 per share in the previous year. Net income was $37.40 million or $1.72 per share, compared to $39.21 million or $1.79 per share in the year ago.
Total operating revenues for the full year rose to $203.00 million from $192.86 million in the prior year. Analysts expected the company to earn $3.28 per share on revenue of $198.36 per share for the full year.
For the first quarter, the company expects FFO to be approximately in the range of $0.72 - $0.74 per share. Analysts currently expect the company to earn $0.78 per share for the quarter.
For the full year 2009, the company expects FFO in the range of $3.00 - $3.08 per share. Analysts currently expect the company to earn $3.19 per share for the full year.
SSS closed Tuesday's regular trade at $21.05, down $1.58 or 6.98% on a volume of 669,431 shares on the Nasdaq.
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