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Simon Property's second quarter performance beats analyst expectations

July 30, 2018

Indianapolis-based shopping center giant Simon Property Group Inc. on Monday reported strong first quarter results, exceeding analyst expectations.

The real estate investment trust reported a second quarter profit of $547 million, or $1.77 per share, compared with $382 million, or $1.23 per share, during the same period of 2017. During the second quarter of 2017, Simon noted, results were affected by a financing-related charge of 36 cents per share.

Simon reported funds from operations of $1.061 billion, or $2.98 per share, in the second quarter, compared with $859.7 million, or $2.75 per share, during the year-ago period. Funds from operations, or FFO, is a closely watched measure in the REIT industry that takes profit and adds back items such as depreciation and amortization.

Analysts had expected a profit in the range of $1.57 to $1.69 per share.

Revenue was $1.39 billion in the quarter, up from $1.36 billion a year ago and ahead of analyst expectations of $1.38 billion.

"This was an excellent quarter for our company, with strong financial and operational performance and the successful opening of our fourth outlet center in Canada," CEO David Simon said written remarks. "Based upon our results to date and expectations for the remainder of 2018, today, we raised our quarterly dividend and are again increasing our full-year 2018 guidance."

Simon estimates that its full-year profit will be in the range of $7.46 to $7.54 per share, with FFO within a range of $12.05 and $12.13 per share. Previous FFO guidance has been in the range of $11.95 to $12.05.

The company also reported: 

Retailer sales per square foot for the previous year ended June 30 of $646, an increase of 4.6 percent.

Occupancy of 94.7 percent as of June 30.

Base minimum rent per square foot of $53.84 as of June 30, an increase of 3.3 percent compared to the prior year period.

Simon shares rose 24 cents in early trading Monday, to 168.82 each.

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