Macerich Co. reported better-than-expected second quarter revenue and adjusted profit late Monday as the real estate investment trust benefited from higher sales by tenants and the sale of five non-core malls in smaller markets.
After the markets closed, the Santa Monica company reported adjusted funds from operations (FFO) of 87 cents a share, 17 percent higher than in the same period a year earlier. Revenue rose 26 percent to nearly $263 million.
FFO is a metric preferred by REITS and analysts that removes the profit-reducing effect of property depreciation. Analysts surveyed by Capital IQ on average had expected FFO of 81 cents a share on revenue of $246 million.
Net income, excluding the impact from the properties sold during the quarter, was $234 million ($1.57 a share), a 57 percent increase from the year earlier. Mall occupancy was 93.8 percent at the end of the quarter, compared with 92.7 percent a year earlier.
“Our operating fundamentals continued their upward trend with significant occupancy gains, continued tenant sales growth and a solid same-center net operating income increase,” Chief Executive Arthur Coppola said in a statement.
Macerich, which owns or has interests in 58 regional shopping centers throughout the nation, raised its FFO guidance for the year to between $3.38 and 3.48 a share. The Wall Street consensus estimate is for $3.44.
Shares earlier closed down 73 cents, or 1 percent, to $61.12 on the New York Stock Exchange,
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