UPDATE 2-Kimco 2nd-qtr FFO rises, higher occupancy helps

* Q2 FFO $0.26 with impairments

* Raises full-year FFO forecast

* Shares unchanged after hours (Adds analysts' expectation, rent and occupancy details)

NEW YORK, July 27 (Reuters) - Kimco Realty Corp (KIM.N), the largest U.S. strip mall owner and developer, reported quarterly funds from operations (FFO) that rose, and raised its full-year forecast as occupancy increased.

Second-quarter FFO rose to $105.6 million, or 26 cents per share, compared with a loss of $62.7 million, or 17 cents per share, a year ago, the company said on Tuesday.

Results for 2010 include 39,293 more shares.

Analysts, on average, had expected 27 cents per share share, according to Thomson Reuters I/B/E/S.

Excluding non-cash impairments, FFO was $125 million, or 31 cents per share, compared with $113.8 million, or 31 cents per share, in the year earlier quarter.

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

The company raised its 2010 FFO forecast to a range of $1.14 to $1.18 per share from its previous forecast for $1.10 to $1.15 per share. Analysts had expected $1.12.

Kimco's shopping center portfolio has 935 operating properties, including 818 in the United States, 49 in Canada, 45 in Mexico and 10 in South America. The bulk of its U.S. properties are anchored by grocery stores.

For U.S. properties Kimco has operated at least a year, net operating income, which reflects the cash the properties generate before financing, rose 2.1 percent from a year earlier.

The company signed 46 percent more leases during the quarter calling for 22 percent more square footage.

For the U.S. shopping centers, new leases called for rents that were 1.6 percent lower than expired ones. The biggest drag came from lease renewals.

Occupancy in the company's combined shopping center portfolio was 92.7 percent at the end of the quarter, up 0.40 percentage points from a year-earlier.

Occupancy at its U.S. shopping centers was 92.3 percent at the end of the second quarter, up 0.50 percentage points from last year.

For U.S. properties Kimco has operated at least a year, net operating income, which reflects cash the properties generate before financing, rose 2.1 percent from a year earlier.

Kimco, based in Long Island, New York, issued its results after the stock market close. In after-hours trading, shares were $15.07, unchanged from their close. (Reporting by Ilaina Jonas)