SOUTHFIELD, Mich. (AP) ¿ Sun Communities Inc. reported Friday a $600,000 loss in fourth quarter funds from operations due to heavy charges, but slightly beat analysts' expectations after certain items were excluded. The developer of manufactured home communities also gave guidance for the year. The real estate investment trust said the loss in fourth quarter funds from operations, or FFO, was 3 cents per share, compared with FFO of $4.5 million, or 22 cents per share, in the same period of 2007. Those results include equity loss from affiliate Origen Financial Inc., impairment charges and severance costs. After adjustments, Sun Communities reported FFO of $14.9 million, or 73 cents per share, compared with FFO of $14.2 million, or 70 cents per share, in the fourth quarter of 2007. FFO, which adds such items as amortization and depreciation back to net income, is considered a key measure of strength for REITs because it provides a more accurate picture of cash performance.
Fourth quarter total revenue was $63.2 million, up 6.6 percent from $59.3 million in the same period in 2007. Analysts polled by Thomson Reuters had expected FFO of 72 cents per share on revenue of $54 million. Analysts typically don't include one-time charges in their estimates. Shares rose $1.42, or 15.6 percent, to $10.52 on Friday. For all of 2008, FFO were $26.5 million, or $1.29 per share, compared with $45.4 million, or $2.24 per share, for 2007. After adjusting for charges, full-year FFO was $57 million, or $2.78 per share, compared with FFO of $55.2 million, or $2.72 per share, in 2007. Chief Executive Gary Shiffman said the company was pleased with the year's performance amid the nation's economic uncertainty. "Home sales remained strong, portfolio occupancy gains exceeded budget and nearly all key guidance metrics were achieved," Shiffman said. For 2009, the company predicted FFO in a range of $2.84 to $2.92 per share, an increase of up to 5 percent, due to the affordability of manufactured homes.
"As economic times become more challenging, our product experiences stronger demand which is why manufactured housing has often been characterized as recession-resistant," the company said in its earnings statement. Sun Communities owns and operates 136 manufactured housing communities.