General Growth Properties' Profit Benefits from Asset Sales but Revenue Falls Short
October 31 2016 - 4:22PM
Dow Jones News
By Maria Armental
General Growth Properties Inc. (GGP) on Monday raised its
projected annual profit as quarterly profit surged five fold driven
by property sales, breaking a string of declines.
The Chicago real-estate investment trust, the second-largest
mall owner in the U.S. by number of properties, now expects to make
this year $1.31 to $1.33 a share and $1.52 to $1.54 in funds from
operations, a key industry metric. It had previously projected 70
cents to 74 cents a share in profit and $1.51 to $1.55 a share in
FFO.
Last year, it reported a profit of $1.43 a share and FFO of
$1.44 a share.
Over all, third-quarter profit surged to $674.2 million, or 70
cents a share, while funds from operations fell to 35 cents a share
from 36 cents a year earlier.
Revenue fell 5% to $554.5 million, below analysts' projected
$559.7 million.
Rental rates for signed leases signed in the previous 12 months
rose 12%, the company said, while tenant sales, excluding anchor
stores, rose 1.4%, also on a trailing 12-month basis.
Meanwhile, the percentage of leased properties on a same-store
basis improved to 96.7%, from 96.1% in the previous quarter and
96.5% in the year-ago period.
Expenses rose 11% as the company set aside money as a provision
for impairment.
General Growth, which during the quarter joined forces with
Simon Property Group and Authentic Brands Group LLC to buy teen
apparel retailer AĆ©ropostale, has bought five anchor stores from
Macy's.
General Growth has been selling properties to pay down debt. It
targets lowering its debt burden to about $18.5 billion by year's
end. Company officials have said they expect to end the year with
about $700 million to $800 million in cash and that they intend to
set aside about $250 million of that to pay a special dividend of
about 25 cents a share.
Shares, down 8% this year, fell 1.4% to $24.60 in after-hours
trading.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
October 31, 2016 17:07 ET (21:07 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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