UPDATE 1-AvalonBay Communities' third-quarter FFO rises

(Updates with net earnings, revenue anmd outlook)

NEW YORK, Oct 31 (Reuters) - Apartment owner AvalonBay Communities Inc (AVB.N: Quote, Profile, Research, Stock Buzz) said on Wednesday third-quarter funds from operations rose 11 percent, due partly to newly developed communities.

The company posted third-quarter FFO of $95.3 million, or $1.19 per share, compared with $81.3 million, or $1.07 per share, in the same quarter of last year.

Analysts on average were expecting $1.19 per share in FFO, according to Reuters Estimates.

FFO, a performance measure of a real estate investment trust, removes the profit-reducing effect depreciation -- a noncash accounting item -- has on earnings.

Total revenue rose 12 percent to $210.5 million, the Alexandria, Virginia-based company said. Net income available to stockholders for the quarter was $126.6 million, or $1.58 per share.

AvalonBay said the increase in earnings was primarily attributable to gains from the sale of communities and growth in income from existing and newly developed communities.

Looking ahead, the company said it expects FFO per share in the range of $4.63 to $4.67 for the full year 2007 and FFO per share in the range of $1.16 to $1.20 for the fourth quarter.

Analysts currently expect $1.21 for the fourth quarter and $4.68 for the full year.