Shopping center developer CBL & Associates Properties Inc. on Wednesday reported earnings which beat analyst expectations on lower expenses and higher sales for many of its mall tenants.
"We continue to build on our core leasing and operational strengths," said Stephen Lebovitz, the Chattanooga company's chief executive.
CBL posted first quarter funds from operations allocable to common shareholders of $67.9 million, or 49 cents per share. That's 3 cents per share better than the consensus estimate, figures show.
FFO in the quarter a year ago was $50.1 million, or 76 cents per share.
First quarter 2010 FFO reflects dilution of 31 cents per share as a result of CBL's issuance of 66.63 million shares last June. It also reflects 6.1 million common shares and units issued in conjunction with the stock component of the April, 15, 2009, dividend, the company said.
CBL said same-store sales for mall tenants with 10,000 square feet or less increased 4.7 percent.
Mr. Lebovitz said a strategy to stabilize occupancy and diversify its tenant base have generated positive results.
In the quarter, CBL opened The Pavilion at Port Orange, a 415,000-square-foot open-air development in Port Orange, Fla., at 92 percent leased and committed, the company said.
David Wigginton of Macquarie Capital termed CBL's quarter "pretty strong."
Mr. Wigginton said he expects CBL to continue to deleverage the business.
"One means is an asset sale," he said, adding it could sell assets to joint venture partners.
Katie Reinsmidt, CBL's vice president of corporate communications and investor relations, said retailers are performing better.
"A lot are reporting improved operating margins," she said.
March retail sales grew 1.6 percent seasonally adjusted over February, according to the U.S. Commerce Department.
"It's evident consumers were feeling much better about the economy and their finances last month," said Rosalind Wells, the National Retail Federation's chief economist.
CBL's shares closed Wednesday at $14.03, down 18 cents.