REIT Vornado Realty projects lower 1st-qtr funds from operations; higher revenue

Vornado Realty expects lower 1Q FFO

PARAMUS, N.J. — Vornado Realty Trust, which operates office and retail properties, estimates it will post lower funds from operations in the first quarter, but higher revenue.

In preliminary results issued Tuesday, the company said it projects funds from operations, a key measure of a real estate investment trust’s performance, will be about $1.60 a share, down from $3.17 a share in the same quarter last year.

Excluding one-time items, adjusted funds from operations, or FFO, will be $1.70 a share, up from $1.61 a share, the company said.

Funds from operations is earnings with depreciation and amortization added back in.

Wall Street analysts expect Vornado FFO of $1.54 a share for the quarter, according to a poll by Thomson Reuters.

Vornado expects first-quarter revenue will increase to $682 million from $649.3 million in the prior-year quarter.

The company projects net income attributable to common shares will decline to 77 cents a share from $2.38 a share a year ago. Vornado’s first-quarter 2008 results included one-time gains on sales of real estate and other items.

As of the close of the quarter on March 31, the REIT had about $1.6 billion in cash and roughly $1.8 billion in available in credit.

The company is expected to report full first-quarter results on May 5.

Vornado owns or manages some 100 million square feet of office and retail properties, primarily in New York and the Washington D.C. area.

Its shares fell $1.73, or 3.7 percent, to $45.27 in trading Wednesday.