Shopping Mall Owner Says Earnings Fall
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General Growth Properties, the second-largest owner of shopping malls in America, said fourth-quarter earnings fell 29% because of an increase in debt costs from its acquisition of Rouse Co. Its shares fell as much as 6%.
Net income fell to $66.7 million, or 28 cents a share, from $93.6 million, or 41 cents, a year earlier, the Chicagobased company said in a statement. Revenue rose 29% to $862.2 million from $668.8 million.
General Growth’s earnings have been hurt payments on variable-rate debt, partly from its 2004 purchase of Rouse for $11.3 billion. General Growth later this year plans “several major refinancings” to reduce the impact of rising interest rates, Prudential Equity Group said in a report last month.
General Growth’s funds from operations, a measure of cash flow used by real estate investment trusts, rose 1.1% in the quarter to 91 cents a share from 90 cents. On that basis, which doesn’t comply with generally accepted accounting principles, results missed the $1.01 estimate from Prudential, whose analysts are top-rated by StarMine Inc.
