Rouse says earnings rose 26% for quarter

November 15, 1994|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

The Rouse Co. yesterday reported its earnings jumped more than 25 percent for both the third-quarter and nine-month periods, based primarily on rent and occupancy increases in the company's retail centers.

The Columbia-based development firm generated earnings before depreciation and deferred taxes of $25.7 million, a 26 percent increase from the $20.4 million reported in the period ended Sept. 30, 1993.

Rouse and other real estate companies report earnings before depreciation and deferred taxes because the figures better reflect the specific nature of their industry.

For the first nine months of the year, Rouse reported earnings of $67.1 million, an increase of 26 percent above the $53.1 million figure produced in the comparable period last year.

"We're having our best year in terms of earnings growth of the past five years," said Rouse President Anthony W. Deering. "And that's due to re-leasing in our retail properties, combined with strong activity in our office and mixed-use portfolio and a reduction in interest expense. Those figures have allowed us to produce better results than anyone else in our business."

The reduction in interest and other corporate expenses provided Rouse with a net income of $4.14 million, or 2 cents a share, on revenues of $172.65 million in the third quarter. It was the first time in more than two years that the company posted a positive number in that category. In the previous third quarter, Rouse had a net loss of $4.4 million, or 16 cents a share, on revenues of $165.8 million.

For the first nine months of the year, Rouse had a marginal net loss of $608,000, or 22 cents a share, on revenues of $498.8 million. Those results compare to the $8.8 million, or 36 cents a share, net loss sustained in the 1993 nine-month period, on revenues of $472.9 million.

"The net income figure is due in large part to increases in our retail component, which is being driven by strong centers in large metropolitan areas," said David L. Tripp, a Rouse vice president and the company's director of investor relations.

The third-quarter and nine-month results exceeded Alex. Brown & Sons Inc. expectations for those periods, said Barry P. Oxford, an analyst who tracks the company. Alex. Brown and other analysts predict Rouse this year may surpass its record 1993 performance, when it generated $78.3 million.

Its biggest gain came in net cash provided by operating activities, which rose to $79 million through the first nine months, from $49.2 million a year ago, for a 60.4 percent increase. Much of that was attributed to land sales, Mr. Tripp said. The company's total assets and debt remained virtually unchanged at $2.9 billion and $2.5 billion, respectively.

In a letter to shareholders, Rouse Chairman and Chief Executive Mathias J. DeVito noted that "our land sales program has already met most of its 1994 objectives. The fundamentals of our business are solid, and we are very optimistic about the results for the fourth quarter and 1995."

Rouse will maintain its 17 cents per share dividend in the third quarter, an increase of 2 cents from the Sept. 30, 1993, period, and pay a quarterly dividend of 81 cents on its preferred stock.

On an annualized basis, the common share dividend is 68 cents, while the preferred dividend is equivalent to $3.24 a share.

Rouse's common stock price closed yesterday at $18.25, up 50 cents a share.

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