Apartment Investment Cuts 300 Jobs, Dividend By 58%; View Weak

   DOW JONES NEWSWIRES 
 

Apartment Investment & Management Co. (AIV) swung to a fourth-quarter profit on a surge in income from discontinued operations as the apartment manager cut its dividend by 58% and said it plans to cut 300 jobs, or about 5% of its work force, by March 1.

The real-estate investment trust also projected first-quarter and 2009 results well below analysts' expectations. It sees first-quarter funds from operations of 30 cents to 36 cents a share, with a full-year figure of $1.65 to $1.95. Analysts surveyed by Thomson Reuters expected 72 cents and $2.75, respectively.

REITs in general have been slammed by the global recession as the housing market continues to drop because of tight credit and high foreclosure rates. Apartment Investment Chief Executive Terry Considine on Friday called the economic environment "quite grim" and said the company expects 2009 to be challenging. "We are making every effort to be prepared to weather its storms," he said.

The company said about 780 on-site jobs at its communities were already cut last year due to slumping property sales. The latest round will take place in a number of areas as Apartment Investment expect to save $70 million this year. More job cuts aren't out of the question.

It added redevelopment spending will be slashed to $50 million to $75 million this year from 2008's $242.6 million.

Meanwhile, the REIT posted fourth-quarter net income of $8.1 million, compared with a year-earlier net loss of $12.3 million. On a per-share basis, which includes preferred dividends, Apartment Investment reported a 5-cent loss in the latest quarter and a 19-cent loss a year earlier. On a continuing-operations basis, the loss ballooned to $1.30 a share from 22 cents.

Fundsfrom operations, an important earnings measurement for REITs, fell to 32 cents from 44 cents as revenue dropped 1.9% to $359.6 million.

Analysts on average expected a loss of $1.36, FFO of 49 cents and revenue of $368 million.

Apartment Investment noted rents edged up 0.1% per unit and occupancy rose to 94.7% from 94.5%.

Shares closed Thursday at $7.73 and haven't traded premarket. The stock has lost a third of its value this year.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]