Rouse's third quarter exceeds expectations Mall tenants' sales credited for gains

November 04, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

The Rouse Co. of Columbia said yesterday that its third-quarter cash flow rose 67 percent over the third quarter of 1992, exceeding analysts' expectations.

"They were better than we expected," said Catherine C. Cresswell, an analyst who follows Rouse for Alex. Brown Inc. in Baltimore. The key fact, said Ms. Cresswell: Rouse's mall tenants boosted sales 3 percent over the same quarter of 1992. By comparison, mall developer Taubman Co. saw its tenants' sales increase less 1.5 percent.

Rouse's revenue from retail centers overall rose even more than that, Ms. Cresswell said, because Rouse has been buying out partners in several of its centers.

"In the last 12 months we bought our partners out at White Marsh and also at Owings Mills," said Rouse investor relations director David L. Tripp. He said the company has also bought out partners at two or three other malls in recent years.

Despite the improved cash flow, noncash expenses and prepayment penalties for cutting the company's debt produced a $4.4 million net loss in the third quarter for Rouse.

Rouse said it earned $20.4 million during the quarter before depreciation and deferred taxes. More than $18.4 million of depreciation and $2.9 million of deferred taxes that are accrued now but not yet due produced a $924,000 net loss. The one-time charge for expenses related to early payment of debt added $3.5 million to the loss.

Mr. Tripp said Rouse absorbed the prepayment penalties to refinance debt at lower interest rates.

Retail was by far the biggest engine of profits, Mr. Tripp said. The company's office and mixed-use operations earned only about $100,000 during the quarter. Land sales in Columbia produced $3.7 million in earnings, which largely offset the company's development expenses and corporate overhead.

Ms. Cresswell said Rouse's prospects for late 1993 depend largely on the Christmas shopping season. "I think you could see a fairly decent Christmas this year, and a few months ago I don't know how many people felt that way," she said.

Rouse Co.

... ... ... ... Ticker... ... ... ... ... ... Yesterday's

... ... ... ... Symbol... ... ... ... ... ... Cls... Chg.

... ... ... ... ROUS... ... ... ... ... ... . 18 1/2 ... + 1/4 ..

Period ended

9/30/93... ... ... ... 3rd qtr.... ... Year ago... .Chg.

Revenue... ... ... .. $165,880... ... .$150,981... +9.9%

Net Income... ... ... $(4,414)... ... .$(6,284)... .. --

Primary EPS... ... ... $(0.16)... ... * $(0.13)... .. --

... ... ... ... ... ..9 mos... ... ... Year ago... .Chg.

Revenue... ... ... $472,963... ... ... $432,113... +9.5%

Net Income... ... . $(8,827)... ... . $(14,942)... .. --

Primary EPS... ... .$(0.36)*... ... ... .$(0.31)... . --

Figures in thousands (except per share data.)

*Reflects payment of preferred dividend payments of 81 cents per share for quarter and $2.01 per share for nine months.

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