UPDATE 1-Kimco fourth-quarter FFO beats forecasts

* FFO, ex items, 31 cents/share

* Shares close down 2.7 pct, up slightly after hours

NEW YORK Feb 3 (Reuters) - Kimco Realty Corp (KIM.N), the largest U.S. strip mall owner and developer, reported quarterly funds from operations that beat Wall Street expectations, boosted in part by higher occupancy.

The company said on Wednesday fourth-quarter FFO rose to $119.5 million, or 31 cents per share, compared with $10.5 million, or 4 cents per share in the year-earlier period.

Excluding non-cash impairments and charges for land impairments, FFO was 31 cents a share compared with 46 cents a share in the fourth quarter 2008.

The results beat the average analysts forecasts of 29 cents per share, according to Thomson Reuters I/B/E/S.

FFO, a performance metric, removes the profit-reducing effect of depreciation, a noncash accounting item.

Occupancy at the company's shopping centers rose 0.4 percentage points to 92.8 percent and 0.5 basis points to 92.4 percent in the United States.

For U.S. properties Kimco has operated at least a year, net operating income, which reflects the net cash the properties generate, fell 1.1 percent from a year earlier.

The company issued a forecast for 2010 for FFO of $1.07 to $1.15 per share. Analysts had forecast $1.15 cents per share.

Kimco shares were at $12.78 in after-hours trading, slightly higher than the close of $12.66 on the New York Stock Exchange. (Reporting by Ilaina Jonas; editing by Andre Grenon)