Simon Property raises outlook after solid third quarter

Simon Property Group Inc. on Thursday raised it outlook for the rest of the year after surpassing analyst expectations in a key quarterly performance category for real estate investment trusts.

The Indianapolis-based shopping mall giant reported third-quarter funds from operations of $3.05 per share, up 5.5 percent from the same quarter a year ago. The figure exceeded the prediction of $3.02 by analysts for Zacks Investment Research.

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.

The company now predicts 2018 FFO in the range of $12.09 to $12.13 per share, compared with prior guidance of $12.05 to $12.13.

The company said profit in the quarter came in at $556.3 million, or $1.80 per share. That’s up from $513.8 million, or $1.65 per share, in the third quarter of 2017.

Simon reported quarterly revenue of $1.41 billion, up from $1.4 billion in the year-ago period. It missed the Zacks consensus estimate of $1.42 billion.

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 1.9 percent Thursday morning, to $177.37 each.

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