Simon Property's quarterly profit tumbles

Back to TopCommentsE-mailPrintBookmark and Share

Indianapolis-based Simon Property Group Inc., the largest U.S. shopping-mall owner, said Friday morning that fourth-quarter earnings before gains and losses dropped as unemployment remained close to a 26-year high.

Funds from operations fell to $485.2 million, or $1.40 a share, from $540.5 million, or $1.86, a year earlier, the company said. Adjusted FFO, which excludes costs for an impairment, was $1.66 a share. That exceeded the average analyst forecast of $1.52, based on 15 estimates in a Bloomberg survey.

Quarterly revenue remained flat at about $1 billion, put profit fell 41 percent, from $196.4 million to $115.9 million.

Retailers and their landlords have been hurt by U.S. unemployment, which at 10 percent in December was close to the 26-year peak of 10.1 percent reached in October, according to Labor Department data. Simon has responded by raising money through stock and debt offerings, and in December agreed to buy Prime Outlets Acquisition Co. for $2.33 billion.

“We expect SPG’s portfolio to hold up relatively well due to its high productivity and diverse asset base,” Anthony Paolone and Michael W. Mueller, analysts at JPMorgan Chase & Co., said last week in a note to investors.

Simon announced its results before the start of regular U.S. trading on Friday. The company's stock fell $3.35, or 4.6 percent, to $69.45 per share Thursday in New York Stock Exchange composite trading. The shares gained 69 percent in the 12 months through Thursday, compared with a 40-percent increase in the Bloomberg Real Estate Investment Trust Index.

About 92.1 percent of the regional malls the company operates were occupied, nearly flat with the 92.4-percent occupancy rate from a year ago. About 98 percent of its premium outlet centers were occupied, from 98.9 percent last year.

For the year, FFO fell 6 percent to $1.75 billion, or $5.33 per share, from $1.85 billion, or $6.42 per share last year.

Simon Property Group issued 52.1 million shares through public offerings and dividends in 2009. The impact to FFO per share was 22 cents for the quarter and 57 cents for the year, and the impact to net income per share was 10 cents for the quarter and 21 cents for the year. Net income per share was also hurt by 9 cents for the quarter and the year due to losses on the sale of assets.

For the year ending Dec. 31, the company expects FFO of $5.25 to $5.40 per share, or $5.72 to $5.87 per share, excluding special items. Analysts expect FFO of $5.46 per share.

Finally, Simon declared a dividend of 60 cents, payable on Feb. 26, to shareholders of record as of Feb. 16. The company said it would return to an all-cash dividend after paying partly in stock during 2009..

- Associated Press contributed to this story


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ