NEW YORK CITY-Vornado Realty Trust beat expectations for its latest round of quarterly earnings, reporting funds from operations of $235.3 million, or $1.25 per share, for the quarter that ended June 30. Analysts had predicted a consensus of $1.21 per share for the office and retail REIT's second quarter.
Both FFO and net income were up year over year. VNO's FFO for Q2 2012 was $166.7 million, or 89 centers per share, while its $20.5-million quarterly net income the year prior was bested by the most recent quarter's $145.9 million. Quarterly results this year were aided by VNO's share of the $1.05-billion sale of special servicer LNR, which closed during Q2, and from a mark-to-market value increase in its JC Penney position, along with increases in income from continuing operations.
Those increases, however, were not distributed evenly across the board. EBITDA from New York City office properties that VNO has owned for at least a year rose 8.8% YOY and 9.8% from Q1. Retail property EBITDA rose 4.2%. In the Washington, DC market, however, same-store EBITDA on office assets declined 5.9% YOY.
FFO was weakened by deepening losses from VNO's one-third stake in children's retailer Toys “R” Us. The quarterly loss on VNO's share in the Wayne, NJ-based chain rose to $25.1 million from $7.7 million the year prior, although that loss was offset by a value increase to $9 million of VNO's JC Penney stake, compared with a quarterly loss of $58.7 million on that stake a year ago.
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