Simon Property Group Reports Strong Results, Raises Guidance

Mall operator Simon Property Group SPG reported first quarter results that beat analyst estimates pre-market Friday. The company also raised its outlook for fiscal year 2013 slightly but was still slightly lower than analyst estimates.

For the first quarter of 2013, Simon Property Group reported funds from operations (FFO) of $2.05, beating the consensus estimate of $2.00 by $0.05 or 2.5 percent. Earnings per share fell to $0.91 from $2.18 a year ago, however excluding non-cash gains on dispositions, earnings per share beat the first quarter of 2012's $0.79 by $0.12.

Digging into the results, Simon Property Group reported that first quarter occupancy rates rose to 94.7 percent from 93.6 percent in the same period a year ago, a gain of 110 basis points. Sales per square foot rose 5.7 percent to $575 and minimum rent per square foot rose 3.0 percent to $41.05.

Also, the company declared a flat dividend at $1.15 for the second quarter of 2013 payable May 31 to shareholders as of record May 17. The dividend brings the yield of the stock to 2.16 percent.

Simon Property Group also raised its full-year guidance for 2013 Friday. The company raised its guidance estimate to $8.50-$8.60 per share from $8.40-$8.50 per share previously. Analysts are expecting $8.59 for the fiscal year 2013, so the data may be viewed as slightly weak.

"Our Mall and Premium Outlet portfolio generated 4.8% growth in comparable property net operating income for the quarter as well as a 5.3% increase in tenant sales per square foot," said David Simon, chairman and chief executive officer. "Occupancy increased by 110 basis points and leasing activity remains strong. Given these results and factors, as well as our current view for the remainder of 2013, today we are increasing our 2013 guidance."

Simon Property Group shares did not trade in the pre-market. Shares closed 0.47 percent lower Thursday at $176.01, just below the 52-week high of $176.94.