Vornado Realty Trust ( VNO), which operates office and retail properties, posted a 68% decline in first-quarter earnings, sending shares in the red during morning trading.

Shares of the company fell 2% to $51.67 on Tuesday.

During the quarter, earnings fell to $125.8 million, or 79 a diluted share, compared with $389.6 million, or $2.38 a share, in the year-ago period.

Funds from operations, a key gauge of the real-estate industry, was $268.6 million, or $1.63 a diluted share, compared to $527.9 million, or $3.17 a share, last year.

"We are currently in an economic recession which has negatively affected substantially all businesses, including ours," the company said in a filing. "During the past year, real estate transactions have diminished significantly and capitalization rates have risen."

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