UDR reports lower 2Q funds from operations

The company posted FFO of $49.8 million, or 36 cents per share, down from $66.3 million, or 45 cents per share, in the same quarter in 2007.

Analysts polled by Thomson Financial expected FFO of 36 cents per share.

FFO, a widely used gauge of real estate operating performance, adds depreciation and amortization expenses, as well as other non-operating items, back to net income.

The company said its results were lower in part because it sold more than 25,000 apartment homes in March for $1.7 billion. The sale enabled the company to focus on newer properties with higher rents and lower capital costs, chief executive Thomas Toomey said.

Earnings available to shareholders, meanwhile, fell to a loss of $2.3 million in the second quarter, from a profit of $811,000 in the same period last year.

Rental income rose to $138.8 million from $123.7 million in the prior-year period, and beat analysts' view of $129.1 million.

UDR, based in Denver and formerly known as United Dominion Realty Trust Inc., owned more than 43,000 apartment homes as of June 30, with almost 5,000 more in development.

The company's shares rose $1.09, or 4.4 percent, to $26.12 in afternoon trading. Earlier in the session, the shares touched a new 52-week high of $26.48.