Taubman Centers Inc. delivered first-quarter earnings that slightly missed expectations, but the company raised its guidance range for 2016.
Funds from operations per diluted share were 84 cents, which was 3 cents better than last year, but missed the FactSet estimate of 85 cents. Revenue of $139 million topped last year’s revenue of $128 million and also beat the FactSet estimate of $135 million. Net income fell from $51 million in 2015 to $44 million for the first quarter of 2016. Taubman stock popped over 2 percent in after-hours trading to $70.93.
Tenant sales per square foot for the quarter were down 2.9 percent as compared with last year. However, new tenants like Apple, Microsoft, Athleta, Warby Parker and Bonobos have grown by 150 percent since 2009.
Occupancy in comparable centers increased 0.8 percent to 93.2 percent for the end of March. Average rent per square foot increased 2.7 percent from last year’s first quarter of $59.21 to $60.8o.
“The majority of our centers reported increases in the quarter, but tourist-oriented centers were impacted by the strong dollar, especially in South Florida,” said Robert Taubman, chief executive officer of Taubman Centers.
Taubman opened its first center in Asia in April and sees the region as its area for future growth. For example, sales growth in China is estimated to be in excess of 10 percent, while in the U.S. it is historically 3 to 4 percent.
“Our strong results this quarter, driven by increased rents, were consistent with our expectations,” said Taubman. “During the quarter we also completed the acquisition of a 50 percent interest in Country Club Plaza in Kansas City, Mo.”
Taubman is increasing its guidance for 2016 FFO per diluted common share to $3.75 to $3.95 up from the previous range of $3.45 to $3.65. The company is also increasing its guidance range for 2016 earnings to be $1.85 to $2.10 from a range of $1.55 to $1.80. The company increased its dividend by 5.3 percent to $0.595 cents per share.