NEW YORK Apartment owner Equity Residential (EQR.N) said on Tuesday that a profit measure used for real estate investment trusts rose in the second quarter, helped in part by higher rent and its Archstone acquisition.
The company also lowered the top end of its forecast for the year, chiefly due to completing its $4 billion disposition program earlier than expected.
Excluding costs related to items such as the Archstone acquisition, prepayment penalties and property transactions, Equity Residential reported FFO of $267.3 million, or 71 cents a share, up from $215.0 million, or 68 cents per share, in the year-earlier quarter.
The results met the average of analysts' forecasts, excluding the special items, according to Thomson Reuters I/B/E/S, the higher end of the 67-71 cents per share range that the company had telegraphed earlier.
The measure of funds from operations for real estate investment trusts (REIT) usually removes losses and gains from property sales and eliminates the effect of depreciation on earnings.
Equity Residential, whose chairman and founder is real estate mogul Sam Zell, last quarter bought 60 percent of the $6.5 billion acquisition of Archstone from Lehman Brothers Holding Co. Including the assumption of debt, the acquisition was valued at about $16 billion, of which Equity Residential's portion was $9 billion.
Revenue for properties the company has operated for at least a year grew 4.9 percent in the quarter. Net operating income, which reflects how well the properties are being managed, rose 5.6 percent.
For 2013, Equity Residential lowered the top end of its full-year FFO forecast, excluding nonrecurring items, to a range of $2.80 to $2.85 per share, from a range of $2.80 to $2.90 per share.
The Chicago-based company projects third-quarter FFO, excluding items, in the range of 71 cents to 75 cents per share, while analysts forecast 74 cents per share.
Equity Residential reported results after the close of trading on Tuesday. Its shares closed down 12 cents, or 0.2 percent at $57.66 during the session. Shares were inactive after the release of its quarterly financial results.
(Reporting by Ilaina Jonas; Editing by Ken Wills)