Flat Income Clips Alexander Haagen Stock

Alexander Haagen Properties Inc.’s shares fell 9% after the Manhattan Beach-based shopping center developer reported flat first-quarter earnings and said it expects no improvement this year. The real estate investment trust blamed lower-than-expected leasing trends at some of its California strip malls and other shopping centers for the poor outlook. “The company does not anticipate, barring exceptional events, that quarterly funds from operations per diluted share will be materially above first-quarter results for the balance of the year,” said Edward Fox Jr., president and chief executive. Shares fell $1.44 to close at $14.69 on the American Stock Exchange. Analysts were surprised by the announcement, especially since the California economy is one of the strongest in the country. Alexander Haagen owns 58 retail properties, mainly in California. “This is nothing but poor execution, quite frankly,” said James Sullivan, a real estate analyst at Prudential Securities. “There is nothing wrong with these markets. These markets are in excellent shape.” Alexander Haagen posted funds from operations of $11 million, or 35 cents a diluted share, compared with $9 million, or 35 cents, in the year-earlier period. Per-share results reflect an increase in the number of diluted shares outstanding. Revenue rose to $19.5 million from $15.9 million. Funds from operations is a measure of cash flow. It’s generally defined as net income plus depreciation and before any extraordinary items. This figure is considered the best measure of a REIT’s performance because it’s used to calculate dividends. Net income for the quarter was $1.78 million, or 8 cents a share, up from $933,000, or 6 cents.