Developers Diversified In-Line With Expectations, Deutsche Bank Reports

Developers Diversified DDR reported operating FFO of $0.25/sh, which was in-line with “our estimate and ahead of the $0.24/sh consensus,” Deutsche Bank reports. Excluded from operating FFO is roughly 10c of non-recurring, mostly non-cash items. “Portfolio metrics were largely ahead of our expectations and demonstrated some sequential acceleration,” Deutsche Bank writes. “Core occupancy (ex-Mervyn's) was up 40bps sequentially (DBe flat) to 92.0%, an improvement from the +30bps increase reported last Q, while leasing spreads were up 4.3% (U.S.) versus +3.9% in 2Q and our -5.0% assumption.” Deutsche Bank says that while the 3Q results were solid and the stock has been strong recently, “we think the shares will continue to outperform on the back of this report.” Developers Diversified closed Monday at $13.40.