By Nathalie Tadena
Boston Properties Inc.'s (BXP) third-quarter earnings slipped
18% as the office landlord's results were hurt by higher interest
expense and losses on early extinguishments of debt, though rental
revenue improved.
The real-estate-investment trust, which also manages and
develops hotel and industrial properties, had seen its bottom-line
results improve in the prior four quarters. But the latest
quarter's results were hurt by a $5.5 million loss from the early
extinguishment of debt. Interest expense jumped 10% to $105
million.
Its properties are concentrated in the Boston, midtown Manhattan
and Washington markets, which were relatively cushioned from the
recession, and where rents are high.
Boston Properties posted a profit of $57.8 million, or 38 cents
a share, down from $70.5 million, or 48 cents a share, a year
earlier. Funds from operations--a key measure of performance for
the real-estate sector--fell to $1.16 a share from $1.28 a share,
though it topped its August view of FFO between $1.13 to $1.15 a
share.
Total revenue jumped 4.7% to $470.9 million, topping the $449
million estimate from analysts polled by Thomson Reuters.
Rental revenue improved 4.6% to $453.5 million.
Leasing rates edged up to 91.6% as of Sept. 30, from 91.3% at
the end of 2011.
Base rent rose 3.3%.
The company projected FFO between $1.22 to $1.24 a share for the
current quarter. Analysts most recently predicted $1.25 a
share.
Shares closed at $107.69 and were unchanged after hours. The
stock, which hit its highest level in five years last month, is up
8.1% since the start of the year.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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