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June 9, 2010
Forest City 1Q Loss Narrows As Signs Of Turnaround Seen
Dow Jones Newswires via The Wall Street Journal
Forest City Enterprises Inc.'s (FCEA, FCEB) fiscal first-quarter loss narrowed as the real-estate company said momentum in the most recent period inspired optimism about a turnaround.
The company, which owns commercial and residential properties, has seen its results improve recently because of fewer write-downs and tax credits. The real-estate bubble popped just as Forest City was embarking on a contentious $4.3 billion revamp of downtown Brooklyn, N.Y., known as the Atlantic Yards development.
That would be Prospect Heights, actually. And "contentious" is putting it mildly.
For the quarter ended April 30, Forest City posted a loss of $15.6 million, or 10 cents a share, narrowing from a year-earlier loss of $30.7 million, or 30 cents a share. The company's earnings before depreciation, amortization and taxes surged 69% to $70.5 million on decreased write-offs of abandoned development projects and lower severance and outplacement costs, among other effects.
Revenue dropped 9.6% to $281.7 million on joint ventures entered into during the quarter and reduced sales of commercial outlots.
NoLandGrab: Like the Nets, who managed not to set the NBA record for futility, Forest City managed to lose less money last quarter.
Related coverage...
Atlantic Yards Report, Forest City Enterprises reports better first-quarter results, AY milestones
Forest City Enterprises reports its first-quarter results, which are better than last year. Notably, the developer states--as it has in the past--that the arena would open in 2012 (not for the 2012-13 season):
...Finally, results from the Nets segment increased $6.5 million, compared with the prior year's first quarter, primarily due to reduced amortization of intangible assets related to the purchase of the team.
AY mentions
The comments in quotes come from CEO Chuck Ratner:
"Another major highlight for the Company occurred early in the second quarter when we achieved vacant possession of the land at our Atlantic Yards project in Brooklyn on May 7. This was the culmination of a six-year journey for Forest City. It allowed us not only to continue to move forward on the overall project, including ongoing construction of the Barclays Center arena, but also to complete the transaction, on May 12, with Mikhail Prokhorov for his investment in the Nets and the arena. With Mr. Prokhorov's $200 million investment completed, he now owns 80 percent of the Nets and 45 percent of the arena project. Once again, our New York team, led by Bruce Ratner and Joanne Minieri, deserves credit for their hard work, creativity and perseverance in achieving these important milestones.
...Finally, construction activity continues for the Barclays Center arena project at Atlantic Yards. All projected debt and equity needed to complete the construction has been fully funded and the Company expects the arena to open in 2012.
Forest City Enterprises Press Release, Forest City Reports Fiscal 2010 First-Quarter Results
Posted by eric at June 9, 2010 10:35 AM