Kimco Realty KIM reported weak third-quarter results that put it slightly behind pace to match our full-year expectations, but not by enough for us to change our forecasts. The weak economy and challenging retail environment pressured operating metrics for this retail real estate investment trust, a trend we expect to continue through at least 2010. For the quarter (on a year-over-year basis), rental property revenue increased 1%, while our reckoning of earnings before interest, taxes, depreciation, and amortization fell 3% to $120 million. On a same-property basis (which is a proxy for internal growth), net operating income fell 3.6%, hurt by tenant bankruptcies and falling occupancy. At the end of the third quarter, occupancy at Kimco's consolidated U.S. properties was 91.5%, down 360 basis points from the prior year and up 10 basis points sequentially.Kimco's noncore investments and joint ventures continued to post results well below prior-year levels, contributing to a 36% decline in reported funds from operations. Even though Kimco is executing its strategy to divest itself of noncore investments and has sold $104 million of them recently, more than $0.5 billion remain on its balance sheet.
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Analyst Notes
07-30-09 | 10:15AM Weak 2Q for Kimco
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