published Friday, July 27th, 2012

CBL posts 'strong' quarterly earnings

CBL Chief Executive Officer Stephen Lebovitz stands in his office overlooking Hamilton Place Mall
CBL Chief Executive Officer Stephen Lebovitz stands in his office overlooking Hamilton Place Mall
Chad McClure
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CBL & Associates Properties Inc.'s second-quarter earnings and revenues beat analysts' estimates as the shopping center developer reported it benefited from higher occupancy rates and rental spreads.

The Chattanooga-based company also increased its guidance for the rest of the year, putting funds from operations at $2 to $2.10 per share, up from $1.95 to $2.03 per share.

"This was a strong quarter for CBL in all respects," said Stephen Lebovitz, CBL's chief executive officer, in a news release after markets closed.

He said CBL "exceeded expectations in all of our primary metrics. We enter the second half of the year with a more positive outlook."

Funds from operations in the second quarter were $79.9 million, or 53 cents per share.

That's up from $73.7 million, or 50 cents per share, a year ago, and it beat the analysts' consensus of 49 cents per share.

CBL posted second-quarter revenue of $255.5 million. That's off from $262.1 million a year ago, but it beat the analysts' estimate of $249.1 million.

Katie Reinsmidt, CBL's vice president of corporate communications and investor relations, said the company has most of its centers in midsized cities where mall traffic is improving.

She also said the improved leasing spreads bode well for the future.

In addition, CBL closed on the purchase of a mall in North Dakota and acquired interest in two outlet centers in the quarter.

The Chattanooga real estate trust, which owns and operates Hamilton Place and Northgate malls, reported that same-center net operating income, excluding lease termination fees, increased 2.7 percent in the quarter.

Average gross rent on stabilized mall leases signed during the quarter for tenants 10,000 square feet or less increased 10.2 percent in the period.

Also, same-store sales per square foot for mall tenants 10,000 square feet or less for stabilized malls for the rolling 12 months ended June 30 increased 4 percent, the company reported.

CBL's share price closed Thursday at $19.10, up 36 cents, or 1.92 percent.

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