Equity One EQY reported third-quarter results that show the weak economy continues to have a negative impact on its business. This is consistent with our expectations for this retail real estate investment trust, so we plan no change to our opinion. For the quarter (on a year-over-year basis), revenue rose 18% and earnings before interest, taxes, depreciation, and amortization increased 17%, both driven by a 21% increase in income-generating assets. We believe Equity One's same-store results better reflect the underlying health of its operating portfolio, and same-store metrics were weak. Same-property occupancy fell to 90.1%, down 200 basis points from the prior year and 60 basis points sequentially. Same-property net operating income declined 4.5%. Leasing results in the quarter were mixed, with large rental increases realized on new leases, but rental rate declines on leases renewed with existing tenants.We had thought Equity One's dividend was in danger of being cut, and that concern came to pass as the firm announced a lower dividend in its third-quarter press release. The company cut its quarterly dividend 27% to a new rate of $0.22 per common share, which should better align its dividend payout with the lower earning power of its properties in the current downturn.
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Analyst Notes
07-30-09 | 10:15AM Weak 2Q for Equity One
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