Apartment Investment and Management Co, one of the largest U.S. apartment landlords, said on Friday that quarterly funds from operations rose 8 percent, but Florida dragged down results, and its shares fell 6.5 percent.
The company, known as Aimco, reported third-quarter funds from operations of $80.2 million, or 83 cents a share, compared with $74.3 million, or 74 cents a share, in the same period a year ago.
Third-quarter FFO before charges was 86 cents per share, above the company's forecast of 80 to 84 cents. The average of analysts' forecasts was 83 cents, according to Reuters Estimates.
FFO removes the profit-reducing effect that depreciation a noncash accounting item has on earnings.
For the core 360 properties which the company has owned at least a year, the average monthly rent rose 3.2 percent, or $27, to $877 per unit. Occupancy inched up to 94.8 percent from 94.4 percent.
The higher rents and occupancy rates led to a 4.2 percent rise in comparable revenue to $259.1 million. Although comparable net operating income rose 4.9 percent, it fell 0.4 percent against the prior quarter and trailed the company's forecast of 5 percent to 7 percent.
Florida, with vast oversupply of housing, proved difficult.
This market continues to weigh heavily on the company's results same-store net operating income down 4.8 percent in the third quarter and is likely to continue to prove a drag on growth through much of the next year, Raymond James analyst William Crow wrote in a research note.
In fact, the prospective buyer of two Miami high-rises, Flamingo North and Central Towers, walked away from its option during the quarter. Aimco recognized income of $5.5 million, net of tax, for the foregone option.
The Denver-based real estate investment trust sees fourth-quarter FFO in a range of 89 to 95 cents per share, before charges. Analysts, on average, had been expecting the company to post fourth-quarter FFO of 90 cents per share, according to Reuters Estimates.
For the full year, Aimco raised the lower end of its forecast range for 2007 FFO to $3.37 from $3.33 per share while maintaining the upper and end of $3.43 per share.
Aimco shares traded at $41.40, down $2.84, in early afternoon activity on the New York Stock Exchange. Year-to-date, Aimco shares are down about 26 percent, while those of rival UDR Inc down 30 percent.