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Updated from 10:38 a.m.

Shares of

Mills Corp


plunged 14% early Tuesday after the mall owner warned late Monday that it expects third-quarter results to be "substantially below" expectations and delayed its earnings release until next week.

The Arlington, Va., real estate investment trust, which focuses on developing mammoth retail centers, rescheduled its earnings conference call to Nov. 9, saying that it needs additional time to evaluate the accounting for several items. Mills had been set to report its results Tuesday.

Analysts polled by Thomson First Call currently expect Mills to report funds from operations of $1.06 a share. For last year's third quarter, Mills posted FFO -- a key measure of a REIT's performance -- of 89 cents a share.

In August, Mills tempered its forecasts for the year, projecting that 2005 FFO would come in at the low end of its previously issued guidance of $4.35 to $4.45 a share due to increased costs associated with its international operations, reduced leverage, higher preferred dividends and rising interest rates.

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In early October, Mills said its chief accounting officer, Michael Green, resigned, effective Oct. 27, to accept a position as chief financial officer of a Washington, D.C.-based private real estate company. Mary Jane Morrow, Mills' chief financial officer, is handling the accounting chief's responsibilities until a replacement is found for Green.

In a research note Tuesday morning, David Fick, an analyst with Legg Mason (which provides investment banking services to Mills) wrote that "the terse content (of the press release) is inexcusable, in our view."

However, Fick wrote that based on his discussions with management after the announcement, the issue doesn't involve a financial restatement. He suspects the issues are one-time costs affecting only the third-quarter results. Examples, he noted, could include executive re-staffing charges, financing costs, abandoned project charges or impairments.

Mills spokesman David Douglass declined to comment further on the press release or the possibility of a financial restatement.

As a result of the news, Fick raised his risk rating on Mills' shares from average to high and said "investors with little risk tolerance should consider selling MLS shares, while investors with high risk profiles should consider taking advantage of the potential opportunity on any share price weakness."

"We think MLS shares are cheap at this level and see no point in downgrading our rating on the shares," Fick wrote.

Citigroup downgraded Mills to sell from hold Tuesday morning. JP Morgan downgraded the stock to neutral from overweight.

Mills shares recently were down $7.47 to $46.03.