Real estate investment trust Simon Property Group, Inc (SPG) on Friday posted higher third quarter funds from operations, or FFO, despite lower occupancy rates.
The Indianapolis-based company reported third quarter FFO of $473.1 million, or $1.38 per share, compared with $463.9 million, or $1.61 per share, in the year-ago period. On average, Wall Street analysts expected a lower $1.32 per share.
Revenue fell 1% from last year, to $924.9 million. Simon combated the lower revenue by charging higher prices and reducing expenses.
FFO is the key metric used to measure the performance of REITs, since it adds depreciation and amortization expenses back into net income.
The company said that regional mall occupancy rates fell to 91.4% in the period, down from 92.5% last year, and that premium outlet center occupancy fell to 97.5% from 98.8%.
Looking ahead, the company raise the low-end of its full-year FFO forecast. It now expects FFO of $5.40 to $5.50 per share, up from a prior range of $5.35 to $5.50 per share. Analysts currently expect $5.43 per share.
Simon Property Group shares fell 60 cents, or -0.9%, in morning trading Friday.
The Bottom Line
We recently removed shares of SPG from our "recommended" list on Sept.29, when the stock was trading at $71.65. The company has a 3.52% dividend yield, based on last night's closing stock price of $68.17. The stock has near-term technical support in the $58-$64 price area. If the shares can firm up, we see overhead resistance around the $72-$74 price levels. We would remain on the sidelines for now.
Simon Property Group, Inc (SPG) is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.
