* 2nd quarter share/FFO $0.73 vs Wall Street’s $0.70
* Tenant sales up 8.4
* Company raises outlook
By Ilaina Jonas
NEW YORK, July 26 (Reuters) - Taubman Centers Inc said a key earnings measure rose and it raised its outlook for the year, as rent at its luxury malls increased in the second quarter.
But for the first time in over two years, sales at its tenants’ stores failed to rise by double-digits.
“While increases in sales per square foot moderated from the double-digit sales increases we saw for the previous nine quarters, retailer sentiment remains very positive. Leasing activity continues to be strong and retail bankruptcies remain at historic lows,” Robert Taubman, chairman and chief executive officer said in a statement.
Taubman said second-quarter funds from operations - which (FFO)removes the effect of depreciation, a non-cash accounting item, has on earnings - rose to $43.8 million, or 73 cents a share, from $35.4 million, or 61 cents per share, a year ago.
Analysts, on average, had expected 70 cents per share, according to Thomson Reuters I/B/E/S.
The quarterly FFO excludes the Pier Shops and Regency Square, which it handed over to special servicers.
Sales at its luxury properties, which include The Mall at Short Hills in New Jersey and Beverly Center in Los Angeles, rose 8.4 percent during the quarter to a new record of $672 per square foot on a trailing 12-month basis.
For properties the company has owned at least a year, occupancy rose to 92.2 percent from 90.9 percent a year earlier. Average rent per square foot rose 3.8 percent from a year earlier. Net operating income, an indicator of how well the properties are managed, was up 8.2 percent.
The company, based in Bloomfield Hills, Michigan, raised its forecast for 2012 to FFO in the range of $3.22 per share to $3.27 per share from an previously raised $3.18 per share to $3.25 per share. Analysts on average estimate $3.24 per share, according to Thomson Reuters I/B/E/S.
Taubman shares closed at $76.90 up, 0.9 percent, or 67 cents, on the New York Stock Exchange. Its shares have gained 24 percent since the start of the year, outperforming the benchmark MSCI U.S. REIT index, which is up 13.4 percent. The shares were unchanged after hours.