By Anna Prior
Vornado Realty Trust swung to a fourth-quarter loss as the
latest quarter was hit by negative funds from operations from the
commercial property owner's stake in Toys "R" Us.
However, adjusted funds from operations exceeded Wall Street's
expectations.
The real-estate investment trust manages and owns commercial
properties around the District of Columbia and New York. It has
been buying more in its strongest markets, while unloading
properties in noncore areas.
Vornado also holds major stakes in companies such as Toys "R" Us
Inc., though it sold its stake in retailer J.C. Penney Co. last
year.
Earlier this month, Vornado disclosed that fourth-quarter
results would include a $162.2 million noncash impairment from the
company's stake in Toys "R" Us that would hurt the bottom line by
82 cents a share. In December, Vornado said its fourth-quarter
results would include a net loss of $130.9 million, or 66 cents a
share, from Toys "R" Us's fiscal third-quarter results, wider than
the net loss of $73.8 million, or 37 cents a share, recorded a year
earlier. The toy retailer, which is also owned by Bain Capital and
Kohlberg Kravis Roberts & Co. in December reported a sharply
wider fiscal third-quarter loss amid lower sales in the U.S. and
abroad, and an income tax expense in the latest period.
On Monday, Vornado reported a loss of $68.9 million, or 37 cents
a share, compared with a year-earlier profit of $62.6 million, or
33 cents a share. The latest quarter included $127.5 million of
gains related to the sale of real estate, compared with $281.5
million in asset-sale-related gains for the year-ago period. The
latest quarter also included $32.9 million of real-estate
impairment losses, compared with $117.9 million of real estate
impairment losses a year earlier. Excluding net asset-sales gains,
impairment losses and other items, adjusted earnings rose to 57
cents a share from 41 cents.
Negative funds from operations--a key measure of performance in
the real-estate sector--was four cents a share in the latest
period, compared with funds from operations of 30 cents a share a
year earlier. On an adjusted basis, FFO rose to $1.33 from $1.11 a
share.
Revenue slipped 1.9% to $673.3 million.
Analysts polled by Thomson Reuters expected adjusted FFO of
$1.17 a share on revenue of $665.7 million.
Shares ended Monday at $94.64 and were flat in recent
after-hours trading. Through the close, the stock has risen 11% in
the last 12 months.
Write to Anna Prior at anna.prior@wsj.com
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