Finance real estate investment trust Newcastle Investment Corp. said Monday it booked a loss in first-quarter funds from operations after taking charges on its subprime securities portfolio.
Newcastle reported a funds from operations loss of $44.3 million, or 84 cents per share, compared with a gain in FFO of $33.9 million, or 71 cents per share, in the year-ago period.
2008 results include charges of $73.9 million, which included a $40.9 million charge related to its subprime securities portfolio and an $18.3 million charge related to three investments in its commercial portfolio.
On an adjusted basis, excluding charges, the company reported a gain in funds from operations of $29.6 million, or 56 cents per share.
On average, analysts polled by Thomson Financial forecast quarterly FFO of 49 cents per share. Analyst estimates typically exclude one-time, unusual items.
FFO, which adds such items as amortization and depreciation back to net income, is considered a key measure of REIT strength because it gives a more accurate picture of cash performance.
Revenue fell 18 percent to $132.9 million from $162.2 million in the first quarter of 2007. The net loss totaled $44.3 million, or 84 cents per share, compared with net income of $33.7 million, or 70 cents per share, a year ago.
Newcastle's $6.7 billion investment portfolio consists of $3.6 billion of commercial assets, $1.3 billion of corporate assets, including REIT debt and corporate bank loans, and $1.8 billion of residential assets.
Newcastle shares dropped 72 cents, or 7.3 percent, to $9.21 in afternoon trading. Shares have traded between $7.50 and $30.35 in the past 12 months.
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