Vornado Realty 2Q Net Down 65% on Investment Losses
08/06/2012| 06:42pm US/Eastern
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By Kristin Jones
Vornado Realty Trust's (>> Vornado Realty Trust) second-quarter profit fell 65% as the commercial-property owner booked continuing losses on its investment in J.C. Penney Co. (>> J.C. Penney Company, Inc.).
Vornado owns and manages commercial properties around New York and the District of Columbia, markets that have remained strong. The company recently inked a deal to pay $707 million for a piece of prime retail space at 666 Fifth Ave. in Manhattan, home to popular clothing stores Uniqlo and Hollister.
Vornado also holds major stakes in companies like J.C. Penney and Toys "R" Us Inc., investments that have yielded varying returns.
Overall, Vornado reported a second-quarter profit of $38.3 million, or 11 cents, down from $108.6 million, or 49 cents, a year earlier. Excluding gains on real-estate sales, impairments and other items, per-share income fell to 35 cents from 38 cents.
Funds from operations--a key measure of performance in the real estate sector--fell to 89 cents a share from $1.27. Excluding items like a loss of $58.7 million from the mark-to-market value of J.C. Penney derivative positions, FFO fell to $1.13 a share from $1.15.
Revenue increased 0.7% to $532.4 million.
Analysts polled by Thomson Reuters recently forecast per-share earnings of 31 cents, FFO of 95 cents, and revenue of $651.7 million.
Shares were up fractionally to $85.69 after hours. Through the close, the stock was up 11% so far this year.
Write to Kristin Jones at kristin.jones@dowjones.com
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