Duke Realty backs 2009 guidance, cuts dividend

Commercial real estate developer Duke Realty on Wednesday backed its full-year guidance, but cut its dividend for the remaining three quarters of the year.

The real estate investment trust said it still expects to post full-year funds from operations between $1.85 and $2.15 per share before the effects of debt repurchases, potential impairment charges or the costs of a stock offering announced Wednesday.

That matches the forecast the company offered when it released fourth-quarter results Jan. 28.

Analysts polled by Thomson Reuters, on average, expect FFO of $2.02 per share for the year, with estimates ranging between $1.75 and $2.50.

FFO, a widely used gauge of real estate operating performance, adds depreciation and amortization expenses, as well as other non-operating items, to net income.

The company expects to post a net loss for the year between 8 cents and 16 cents per share. Wall Street, on average, expects a net loss of 16 cents per share., with estimates ranging from a loss of 29 cents to a profit of 9 cents.

For the first quarter, Duke Realty said it expects to post FFO of 49 cents to 51 cents per share, down from 57 cents per share in the year-earlier quarter. The decline is the result of lower property sales, Duke said.

Analysts are expecting 51 cents, on average.

Adjusted for $33.1 million of gains from the repurchase of unsecured bonds, first-quarter FFO is forecast between 70 cents and 72 cents per share.

After paying a dividend of 25 cents for the first quarter, Duke said its dividend for each of the remaining three quarters of the year will drop 32 percent to 17 cents.

The decrease is being made to "maintain financial flexibility" and to account for dilution from the increased number of shares related to its stock offering announced Wednesday. The company plans to sell 64 million shares.

During the quarter ended March 31, Duke said it completed $156 million of 10-year secured debt financing. The proceeds were used mainly to pay down its unsecured line of credit. The company said it is in discussions for further secured debt financing with multiple lenders.

For the first quarter, Duke said its in-service properties were 89.7 percent leased, down from 92.4 percent on Dec. 31. The percentage decline reflects the addition of five properties and lease expirations during the quarter.

Duke is slated to report its full first-quarter results on April 30.