Boston Properties Inc., owner of top-quality office buildings in key U.S. cities, posted better-than-expected funds from operations but lowered its forecast for the year to account for more shares and a pending property-portfolio sale.
The company, which owns buildings in Manhattan, Boston, San Francisco and Washington, D.C., on Monday posted first-quarter funds from operations (FFO) that rose 7 percent to $160 million, or $1.12 per share, compared with $149.6 million, or $1.08 per share, a year earlier. The opening of new buildings in New York and Boston helped boost its results.
Analysts on average were expecting FFO of $1.09 per share, according to Thomson Reuters.
FFO, a measure of performance of a real estate investment trust (REIT), removes the profit-reducing effect that depreciation has on earnings. It also usually excludes gains on property sales.
The company is scheduled to hold its quarterly conference call on Tuesday morning.
Shares of Boston Properties hit a 12-month high of $105.28 during Monday and closed at $104.10, down 0.4 percent, and were unchanged after hours.
"It’s sort of priced for perfection at this point, but overall it was a really solid quarter," said Ian Goltra, lead portfolio manager with Forward Management.
Revenue rose 10.5 percent to $417.9 million.
Boston Properties, whose chairman and chief executive officer is publisher Mortimer Zuckerman, forecast second-quarter FFO of $1.18 to $1.20 per share, higher than the analysts’ average estimate of $1.15 per share.
The company lowered its forecast for the full year to FFO of $4.45 per share to $4.55 per share from its previously raised forecast of $4.55 to $4.60.
Analysts on average had been expecting $4.55 per share, according to Thomson Reuters I/B/E/S.
New shares issued this year account for a reduction of 9 cents a share of the forecast, and the pending $468 million sale of its Carnegie Center portfolio in New Jersey accounts for another 9-cents-a-share reduction. The sale would mean less rent until the company uses the gain for further development or a building purchase.
