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MarketScreener Homepage  >  Equities  >  Nyse  >  Simon Property Group, Inc    SPG

SIMON PROPERTY GROUP, INC

(SPG)
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Simon Property results easily beat Wall Street views again

02/04/2013 | 02:00pm EST

(Reuters) - Simon Property Group Inc (>> Simon Property Group, Inc) reported a 21.9 percent increase in a key earnings measure for the fourth quarter, easily beating analysts' estimates, as rents and sales rose at its malls and outlet centers.

(Reuters) - Simon Property Group Inc (>> Simon Property Group, Inc) reported a 21.9 percent increase in a key earnings measure for the fourth quarter, easily beating analysts' estimates, as rents and sales rose at its malls and outlet centers.

The No. 1 U.S. mall and outlet center owner also raised its dividend on Monday for the sixth straight quarter.

"They just continue to defy gravity," said Uniplan Investment Counsel President Richard Imperiale, whose fund owns Simon shares. "When you think they're going to flatten out just because there's no more room on the upside, they continue to churn out good operating results."

Simon is the first large mall operator to report results for the fourth quarter, when holiday shopping was less than stellar.

The only real estate company in the Standard & Poor's 100 index <.SPX>, Simon owns or has an interest in 328 retail properties in North America and Asia.

Simon said fourth-quarter funds from operations had increased to $827.4 million, or $2.29 per share, from $678.9 million, or $1.91 per share, a year earlier.

Analysts on average had expected FFO of $2.17 a share, according to Thomson Reuters I/B/E/S.

Expense reduction helped Simon exceed Wall Street estimates, Imperiale said.

For about the past two years, the company has repeatedly beaten analysts' forecasts. On Monday, its shares rose 70 cents to $162.68. Meanwhile, the S&P 500 <.SPX> was down 1 percent and the benchmark REIT index, the MSCI US <.RMZ>, fell 0.3 percent.

FFO, a performance measure for real estate investment trusts, usually excludes gains or losses from property sales and removes the effect that depreciation has on earnings.

Simon's fourth-quarter revenue rose to $1.34 billion from $1.17 billion, while analysts were expecting $1.30 billion.

HIGHER DIVIDEND

As a real estate investment trust, Simon is required to pay out at least 90 percent of its taxable income to shareholders in exchange for being exempt from most corporate-level income tax. That has prompted Simon to keep raising its dividend.

The company raised its quarterly dividend to $1.15 per share from $1.10. The dividend is payable February 28 to shareholders of record on February 14.

"We did have a really, really good year," Chairman and Chief Executive Officer David Simon said on a conference call with analysts. "We worked our a-- off in '12 to deliver that. We had a lot of moving pieces as we always do. We did a lot of deals. Hopefully, the fruits of those investments did show to some extent in '12. But they'll show more importantly in '13 and '14."

Simon forecast full-year 2013 FFO, excluding one-time items, at $8.40 to $8.50 per share. Analysts expect $8.41 per share for the year, according to Thomson Reuters I/B/E/S.

The company's forecasts tend to be conservative, and Simon often raises them each quarter.

Simon's portfolio includes some of the most popular U.S. malls, including Roosevelt Field Mall and Woodbury Common Premium Outlets in New York, the Forum Shops at Caesars Palace in Las Vegas, and Lenox Square Mall in Atlanta.

The company has outlet centers in Canada, Malaysia, Japan, South Korea and in Europe. It is redeveloping or expanding about two dozen properties in the United States and two in Japan. It also has five of its Premium Outlet brand centers under construction - two in the United States - and plans to break ground on a new one in Montreal in the next quarter.

Simon plans to spend about $5 billion on development and redevelopment over the next three or four years, David Simon said.

Last year, Simon also bought a 28.7 stake in Klepierre SA (>> KLEPIERRE), Europe's second-largest retail real estate owner, and has three seats on the French company's board. David Simon is chairman.

In the fourth quarter, sales, rent and occupancy all increased. Sales at tenants' stores at Simon's U.S. core portfolio malls and outlet centers rose 6.6 percent on a trailing 12-month basis to $568 per square foot.

Stronger sales attract tenants and eventually lead to higher rents. Also, landlords take a share of tenants' sales.

Occupancy at Simon's malls and outlet centers rose to 95.3 percent from 94.6 percent a year earlier, and the company was able to push up average base rent 3.4 percent to $40.73 per square foot.

(Reporting By Ilaina Jonas; Editing by Gerald E. McCormick, Lisa Von Ahn and Nick Zieminski)

By Ilaina Jonas

Stocks treated in this article : KLEPIERRE, Simon Property Group, Inc

© Reuters 2013
Stocks mentioned in the article
ChangeLast1st jan.
BASE CO., LTD. -1.36% 5800 End-of-day quote.-5.69%
BASE,INC. -3.96% 10680 End-of-day quote.9.43%
DJ INDUSTRIAL 0.38% 30930.52 Delayed Quote.0.68%
EURO 50 SELECT 4.75% DECREMENT (SHLE, UHD) 0.11% 655.414667 Real-time Quote.-22.14%
EUROPE SELECT GREEN 50 5% DECREMENT (DIV, UHD) 0.79% 1491.436978 Real-time Quote.-9.25%
KLÉPIERRE 0.22% 18.21 Real-time Quote.-1.20%
MCCORMICK & COMPANY -0.45% 93.01 Delayed Quote.-2.27%
NASDAQ 100 1.50% 12996.536673 Delayed Quote.0.84%
NASDAQ COMP. 1.53% 13197.179496 Delayed Quote.0.86%
S&P 500 0.81% 3798.91 Delayed Quote.1.14%
SIMON PROPERTY GROUP, INC -0.35% 92.67 Delayed Quote.9.05%
SQUARE, INC. -0.22% 227.26 Delayed Quote.4.42%
THE LEAD CO., INC. 3.63% 856 End-of-day quote.1.90%
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Financials (USD)
Sales 2020 4 557 M - -
Net income 2020 1 156 M - -
Net Debt 2020 26 871 M - -
P/E ratio 2020 25,2x
Yield 2020 6,47%
Capitalization 30 408 M 30 408 M -
EV / Sales 2020 12,6x
EV / Sales 2021 12,8x
Nbr of Employees 4 000
Free-Float 94,7%
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Technical analysis trends SIMON PROPERTY GROUP, INC
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 19
Average target price 96,32 $
Last Close Price 92,67 $
Spread / Highest target 62,9%
Spread / Average Target 3,93%
Spread / Lowest Target -20,1%
EPS Revisions
Managers and Directors
NameTitle
David E. Simon Chairman, President & Chief Executive Officer
Brian J. McDade Chief Financial Officer, Treasurer & Executive VP
David Schacht Chief Information Officer & Senior Vice President
Richard S. Sokolov Vice Chairman
Karen N. Horn Independent Director
Sector and Competitors