Chattanooga-based CBL earnings flat in first quarter

Chattanooga-based CBL earnings flat in first quarter

April 29th, 2014 by Mike Pare in Business Around the Region

CBL Chief Executive Officer Stephen Lebovitz stands in his office overlooking Hamilton Place Mall

Photo by Chad McClure

Despite higher store closings and bankruptcies coupled with the harsh winter, CBL & Associates Properties Inc. posted flat first-quarter earnings Monday and met analyst expectations.

"Looking forward, we expect the stronger sales gains reported by retailers in April to continue and offset the sluggish sales results in the first quarter," said Stephen Lebovitz, chief executive of the Chattanooga-based shopping center developer, in a statement.

Funds from operations per diluted share, as adjusted, was 52 cents for the first quarter compared with 53 cents for the prior-year period. Analysts said the company was expected to earn 52 cents.

Mall same-center net operating income increased 1.6 percent in the quarter, while average gross rent per square foot for stabilized mall leases signed in the quarter grew 9.5 percent, the company reported after the markets' close.

Total portfolio occupancy increased to 92.5 percent, CBL said.

Net income for the quarter was $44.1 million, or 26 cents per diluted share, compared with net income of $19.1 million, or 12 cents per diluted share a year ago, according to CBL.

The business held steady in its outlook with adjusted 2014 FFO expected to come in at between $2.22 to $2.26 per share.

Lebovitz said CBL's priorities include executing both its near-term operational initiatives for 2014 and longer-term strategic objectives to position CBL for a higher sustainable growth rate.

Earlier this month, CBL officials said the company plans to sell off 21 of its malls, or about a quarter of its nationwide holdings, to boost income and upgrade remaining properties.

Lebovitz said CBL is to divest the properties within the next 24 to 36 months. He didn't identify the centers, but neither Hamilton Place mall nor Northgate Mall locally are on the list.

Farzana Mitchell, CBL's chief financial officer, said plans are to add just negligible debt as it executes its initiative.

"Our goal is to accelerate and drive growth through smart re-positioning strategies," she said.

The company reported that, consistent with its disposition strategy, it entered into a binding contract to sell Lakeshore Mall in Sebring, Fla., for $14 million. That sale is expected to close in May.

CBL shares closed Monday at $18.02, up 28 cents or 1.58 percent, on the New York Stock Exchange.

CBL is one of the largest owners and developers of malls and shopping centers with properties in 30 states totaling 86.9 million square feet.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318.