Simon raises dividend, outlook on solid quarterly results

July 27, 2016

Indianapolis-based Simon Property Group Inc. on Wednesday morning boosted both its dividend and forecast for the year after the company posted better-than-expected earnings in the second quarter.

The nation’s largest mall owner said funds from operations, a key measure of performance for real estate investment trusts, remained flat, at $952.9 million, or $2.62 per share. That compares to $955.4 million, or $2.63 per share, in the year-ago period. But the latest FFO results topped analyst expectations by a penny.  

Profit dropped to $455.4 million, or $1.45 per share, in the second quarter, compared with $472.9 million, or $1.52 per share, last year. But Simon said last year’s higher profit received a per-share boost of 22 cents due to an $80.2 million gain from the sale of securities.

Simon’s second-quarter revenue fell by 2.5 percent, to $1.3 billion, due to “other income” falling by 56.7 percent, to $60.4 million. The overall revenue figure met forecasts.

Average rents increased to $50.43 per square foot, up from $48.07 in the second quarter of 2015.

Occupancy slipped slightly, however, dipping to 95.9 percent in June from 96.1 percent at the same time last year.

Simon now expects 2016 earnings in the range of $6.04 to $6.12 per share, compared with its previous guidance of $6.01 to $6.11. The company also expects funds from operations of $10.77 to $10.85, lower than the average analyst consensus of $10.86 but higher than its previous guidance of $10.72 to $10.82 per share.

The company also declared a quarterly dividend of $1.65 per share, a 6.5 percent year-over-year increase, to be paid Aug. 31.

Simon shares opened Wednesday morning at $224.50 each, near a 52-week high of $226.42 reached earlier in July.



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