Sunday, May 3, 2009

Simon Property earnings up 15%, slashes dividend 0.30 cents a share

Simon Property Group (SPG) said Friday that first-quarter earnings were $107 million, or 45 cents a share, compared to $88 million, or 39 cents a share, in the same period a year ago. Revenue was $918 million compared to $895 million.

Analysts polled by FactSet Research estimated, on average, earnings per share of 25 cents and sales of $886 million. Funds from operations for the quarter increased 13.5% to $477 million from $420 million in the first quarter of 2008. Simon sees FFO in a range of $6.05 to $6.20 per share for the year, and income in a range of $1.45 to $1.60 per share.

Simon reduced its quarterly dividend to 60 cents a share in cash and stock from 90 cents per share, but raised the cash component of the dividend by 3 cents per share.

Last quarter, Simon said it would pay its formerly all-cash dividend in the form of cash and stock, disappointing many real estate investment trust investors who are attracted to steady cash yields.

"Capital still remains quite precious," said Sandler O'Neill Partners analyst Alexander Goldfarb. "This reduction is not terribly surprising.

The new level represents 100 percent of its taxable income.

"MORE CLARITY"

"It's our desire to get to as much cash dividend as we feel comfortable to pay," Chief Executive David Simon said during a conference call with analysts. "I think we'll continue this strategy for '09. As soon as we get more and more clarity in the capital markets ... we're optimistic that we'll reinstate the full cash dividend."


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