Shopping center developer CBL & Associates Properties Inc. posted higher second-quarter earnings even as revenues dropped, and it beat the consensus analyst estimate.
Total funds from operations for the Chattanooga-based real estate investment trust were $59.2 million, or 71 cents per share. That's compared with $54.5 million, or 77 cents per share a year ago.
Analysts had estimated the company would earn 63 cents per share in the quarter.
CBL sold 66.6 million shares of newly issued common stock in the period, raising about $382 million and shoring up its balance sheet along with extensions and modifications to its secured and unsecured lines of credit.
Charles B. Lebovitz, CBL's chief executive officer, said the resiliency of its properties was evident in the quarter.
"In the face of a deteriorating retail environment, we posted an increase in net operating income in the mall portfolio, signed over 1 million square feet of leases and maintained the sequential stabilized mall occupancy rate," he said.
CBL reported that occupancy in its portfolio as of June 30 dipped to 88 percent compared to 91.4 percent a year earlier.
The company maintained its FFO guidance for the year at $2.28 to $2.39 per share.
In the quarter, CBL posted a 2.2 drop in revenues to $266.5 million.
Katie Reinsmidt, CBL's vice president of corporate communications and investor relations, said a lot of the company's focus is on trying to maintain revenue and rent levels, watching expenses and keeping costs under control.
While revenues dipped, "we were able to offset that with expense savings," she said.
Same-store sales for mall tenants of 10,000 square feet or less for stabilized malls fell 6 percent, the company said.
The National Retail Federation expects back-to-school spending to fall by 7.7 percent from 2008 amid the recession.
"The economy has clearly changed the spending habits of American families, which will likely create a difficult back to school season for retailers," said Tracy Mullin, the association's chief executive.
As shoppers focus primarily on price, strong promotions and deep discounts will ultimately win over shoppers, he said.
CBL's shares closed Tuesday at $6.26, up 24 cents, or 3.99 percent.