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; email@example.com