IBJNews

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

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

  2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

  3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

  4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

  5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.

ADVERTISEMENT