NEW YORK (TheStreet) -- Shares of Colony Financial Inc. (CLNY) are rising higher by 6.09% to $23.50 in mid-morning trading on Wednesday, after the company reported a year-over-year increase in its 2014 third quarter earnings results, and announced it reached a "non-binding" merger agreement with Colony Capital LLC.
For the most recent quarter the real estate investment and finance company said net income grew to $32 million or 30 cents per diluted share, from $21 million, or 32 cents per diluted share for the year ago period.
Colony Financial's non-GAAP core earnings for the 2014 third quarter were 38 cents per diluted share, topping the expectations of analysts polled by Thomson Reuters by 1 cent.
Total income for the latest quarter was $77.28 million versus $47.47 million for the 2013 third quarter. Analysts were expecting $82.55 million in revenue for the quarter.
Additionally, Colony Capital, an investment firm founded by billionaire Thomas Barrack Jr., agreed to combine management with Colony Financial in a $657.5 million deal, Bloomberg reports.
The intent of the merger is to benefit the investors of both companies as it brings together Colony Capital's management capabilities and Colony Financial's holdings. The new company will benefit from an REIT structure with the potential for higher valuation, a Sterne Agee analyst told Bloomberg.
Separately, TheStreet Ratings team rates COLONY FINANCIAL INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate COLONY FINANCIAL INC (CLNY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year, compelling growth in net income, good cash flow from operations and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
You can view the full analysis from the report here: CLNY Ratings ReportCLNY data by YCharts