Rouse's earnings are up 18% for third quarter 'Everything is in place for a strong, record year'

November 13, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Despite only modest gains from its retail centers, the Rouse Co. yesterday reported strong third-quarter earnings of $34.5 million, continuing a record-setting pace for 1996.

The 18 percent increase in earnings before depreciation and deferred taxes was largely the result of gains in office and mixed-use properties and land-development activities.

The Columbia-based real estate company also benefited from its acquisition of the Howard Hughes Corp., and the quarter ended Sept. 30 was the first to reflect income from the $520 million purchase.

"The company's record operating results were further enhanced by the inclusion of Hughes' strong earnings," said Rouse President and Chief Executive Officer Anthony W. Deering, in a prepared statement.

"Everything is in place for a strong, record year in 1996 and again in 1997. As always, significant challenges confront us, but the company is in an excellent position to face and overcome them."

Revenues for the third quarter totaled $227.7 million, a jump of 34.5 percent. In the first nine months of this year, Rouse generated earnings before depreciation and deferred taxes of $93.5 million, a 21 percent increase vs. the comparable period a year ago. Revenues climbed 17 percent to $579.8 million.

Following a trend of recent quarterly performances, nonretail projects -- which make up a relatively small portion of Rouse's $4.8 billion portfolio -- experienced dramatic growth.

For instance, earnings from both office and mixed-use projects and land sales more than doubled in the third quarter and nine-month reporting period over 1995.

Rouse attributed the office gains to an overall occupancy of 92 percent, a 10-year high, while land sales benefited from explosive growth at Hughes' 22,000-acre Summerlin project in Las Vegas.

Earnings for the company's 66 retail projects, by comparison, rose just 2 percent in the quarter and during 1996's first nine months.

Rouse said the slight retail gain resulted from flat sales and lower occupancy levels in some projects.

Rouse also is in the process of expanding and renovating 13 malls and selling others to focus its retail centers for maximum earnings growth. By the end of next year, Rouse expects to have sold its interest in 15 shopping centers.

Pub Date: 11/13/96

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