Macerich Posts Gain in Profit

Shopping center operator Macerich Co. reported a jump in operating income and profit during the fourth quarter as the Santa Monica-based company continued to expand.

Funds from operations, a key measure of profitability for real estate investment trusts such as Macerich, were $89.5 million, or $1.16 a share, in the three months ended Dec. 31. That compared with $78.3 million, or $1.04, a year earlier. The results missed Wall Street expectations by about 2 cents a share, and Macerich executives blamed the shortfall on a rise in bad debt.

Net income was $30 million, or 51 cents a share, compared with $25.5 million, or 44 cents, a year before. Revenue rose 15% to $167 million.

Occupancy in the company’s malls, which include Santa Monica Place and the Westside Pavilion in Los Angeles, fell slightly in the fourth quarter to 92.5% from 93.3% a year ago. That slip, and the near-miss of analysts’ expectations, gave investors pause Thursday. Macerich shares fell as low as $58.51 but ended off 5 cents at $60 on the New York Stock Exchange.

“They are still doing very well,” said analyst Craig Silvers of Bricks & Mortar Capital. “The prospects for this company are excellent” because the improving economy should lead to more consumer spending, and Macerich has a strong presence in several lucrative markets.

In December, Macerich announced that it would pay $1.45 billion for Wilmorite Properties Inc. and its operating partnership, Wilmorite Holdings, which control 11 East Coast malls with annual revenue of more than $2 billion.

For the year, funds from operations rose to $299 million, or $3.90 a share, compared with $269 million, or $3.58, in 2003. Net income fell to $82.5 million, or $1.40 a share, compared with $113.2 million, or $2.09, in 2003, when asset sales boosted results. Revenue increased 12% to $563.7 million.