DOW JONES NEWSWIRES
Equity Residential's (EQR) fourth-quarter profit fell 46% as
income from discontinued operations helped year-ago results, though
a key metric for real-estate investment trusts improved.
The country's largest apartment developer and manager has
continued to report improving fundamentals coming out of the
recession and the company has said it remains confident increasing
apartment demand will help produce strong results.
The company has continued whittling its exposure to markets such
as Michigan to focus on higher-profile places such as the
Washington-metro area. Equity Residential has particularly
benefited from its holdings in markets such as New York and
Seattle, which haven't suffered the same high unemployment rates
seen in other cities.
Last week, Equity Residential reported its purchase of a stake
in competitor Archstone has been blocked by the estate of Lehman
Brothers Holdings Inc. (LEHMQ), as Lehman exercised an option to
match the company's $1.33 billion bid. However, Equity Residential
still has a right to buy the remaining 26.5% stake, which Lehman
could also attempt to block and match.
Equity Residential posted a profit of $102.5 million, or 33
cents a share, in the latest quarter, down from $189.4 million, or
65 cents a share, a year earlier. The most recent period included
$68.5 million in net income from discontinued operations, while the
year-ago period included $246.6 million.
Normalized funds from operations, or FFO--an important figure
for REITs--rose to 65 cents a share from 61 cents. The company
predicted 63 cents a share to 67 cents in October.
Revenue increased 13% to $519.3 million, while analysts polled
by Thomson Reuters forecast $521 million.
Same-property revenue rose 5.8% as average rental rates jumped
5.4%. Same-property occupancy rose to 95% from 94.6%.
For the new year, Equity Residential predicted normalized FFO of
$2.68 to $2.78 a share. Analysts expected $2.40 a share. It also
predicted first-quarter normalized FFO of 58 cents to 62 cents,
while analysts expect 57 cents a share.
Shares closed at $60.02 Thursday and were unchanged after hours.
The stock is up 9.9% in the past 12 months.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287;
nathalie.tadena@dowjones.com