NEW HYDE PARK, N.Y. (
Kimco Realty Trust
shares jumped 4.1% amid heavy trading Thursday after the real estate investment trust topped expectations and forecast stronger full-year funds from operations.
analysts issued an upgrade on Kimco Realty shares to hold, from sell, citing its 107.7% jump in comparative year-to-date profits.
The REIT raised its full-year FFO guidance to a range between $1.17 and $1.19 per share, up from its previous forecast for 2010 FFO between $1.14 and $1.18 per share. Analysts expect Kimco to book FFO of $1.11 per share for the year.
Funds from operations, or FFO, is a performance figure generally used by REITs to define cash flow from operations. The metric removes the profit-reducing effect of depreciation.
Kimco, which owns and operates neighborhood and community shopping centers, said quarterly funds from operations declined year-over-year, though results topped expectations by a penny per share.
Quarterly FFO was $110.5 million, or 27 cents per share, compared with year-earlier FFO of $112.5 million, or 30 cents a share.
Net income came in at $17.5 million, down from $28.3 million a year earlier. Revenue jumped 10.7% to $210.5 million.
Occupancy in its total shopping center portfolio rose slightly to 92.7%, up 30 basis points from the third quarter last year. Occupancy at U.S. shopping malls rose to 92.3%, up 40 basis points.
Kimco's focused competitors in the retail REIT sector, according to
Revere Research, include
Developers Diversified Realty
CBL & Associates Properties
General Growth Properties
, among others.
Developers Diversified recently posted adjusted quarterly FFO of 25 cents per share, a penny ahead of analysts' consensus call, and said its occupancy rate pushed up to 92%, from 90.9%.
Following its earnings release, analysts from Deutsche Bank upgraded Developers Diversified to buy from hold, and raised their price target on the stock to $15, from $13. UBS reiterated a buy rating and also raised its price target by $2 to $15. RBC Capital Markets reiterated a sector perform rating and raised its price target by $1 to $13.
CBL beat Wall Street's expectations with funds from operations of $65 million, or 47 cents per share, thanks to higher rental revenue. Portfolio occupancy pushed up to 91% as of Sept. 30, up from 89.2% a year earlier.
General Growth reported negative FFO for the third quarter as reorganization expenses amid the mall owners' bout with bankruptcy pressured its bottom line. The U.S. shopping mall owner said it expects to emerge from bankruptcy on or around Nov. 8th.
Macerich topped consensus estimates with earnings per share of 66 cents despite weak revenue. It also lowered the high end of its previously forecast fiscal 2010 FFO guidance.
DDR shares were 3.4% higher Thursday. CBL gained 4%, General Growth 1.4% and Macerich 3.3%.
-- Written by Miriam Marcus Reimer in New York.
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