Equity LifeStyle Reports Drop in 1Q Earnings
Equity LifeStyle Properties Inc., an owner and operator 312 RV parks and manufactured home communities in 28 states and British Columbia, said net income fell nearly 22% in the first quarter, a result that company CEO Thomas Heneghan called disappointing in a conference call with analysts Tuesday (April 15).
According to Medill Reports, Chicago, net income in the quarter, ended March 31, fell to $12.7 million from $16.2 million in the year-ago period.
Funds from operations rose 3.5% to $32.6 million, or $1.07 per diluted share, from $31.5 million, or $1.04 per diluted share in the year-earlier period. The company projected diluted shares of FFO to range from $3.15 to $3.30 for the year ending Dec. 31, 2008.
FFO, a widely used gauge of real estate operating performance, adds depreciation and amortization expenses, as well as other non-operating items, back to net income.
Heneghan attributed the bleak first-quarter numbers to the current state of the economy. “We believe the significant destruction in the credit market and the related fiscal and monetary responses, including both those under discussion and those that have been implemented, are creating additional volatility and uncertainty,” he said.
Revenues from the sale of inventory homes fell 32% to $6.2 million compared with $9.1 million in the same period a year ago, resulting in a net loss of $253,000 from the sales, compared with a net gain of $772,000 in the first quarter of 2007.
Property operating revenues increased by 5.8% to $106.4 million compared with $100.6 million in the first quarter of 2007.
The company said expenses in its property operating section rose by nearly 5%, but said it expects a cooling in costs to about 4% for the rest of 2008 because of anticipated insurance savings.
In addition, the company announced a plan to boost revenues and occupancy. Joe McAdams, president of Equity LifeStyle Properties, detailed how the company would focus on improving sales and marketing, including developing a customer data warehouse for customizing marketing campaigns and revamping the sales process.
“Our first quarter shows the stability of our business,” remarked Heneghan. “We are confident in our business plan, and over the long term, we believe we will be able to react to the changing economic environment.”