HCP 3Q FFO plunges on impairments, legal charges

LONG BEACH, Calif. (AP) — Health care real estate investment trust HCP Inc. said Tuesday its third-quarter results plunged on a series of impairments and legal charges.

HCP said its funds from operations, or FFO, fell to $32.2 million, or 11 cents per share from $178.3 million, or 70 cents per share, in the year-earlier period.

Excluding charges, the company recorded FFO of 52 cents per share. Analysts polled by Thomson Reuters expected FFO of 53 cents per share.

FFO, which adds such items as amortization and depreciation back to net income, is considered a key measure of strength for real estate investment trusts because it provides a more accurate picture of cash performance.

The company reported a net loss of $52.4 million, or 18 cents per share, compared with net income of $119.6 million, or 49 cents per share, a year prior.

Revenue fell 5 percent to $255.3 million from $267.9 million.

The latest quarter included nearly $102 million in legal expenses and about $15.1 million in impairment charges.

In September, a jury awarded Ventas Inc. more than $101 million in damages in its case against HCP, which had been accused of driving the buyout price of Sunrise Senior Living real estate investment trust with a rogue competing bid. HCP intends to appeal the decision.

Looking ahead, HCP expects adjusted FFO in fiscal 2009 to range from $2.10 to $2.16 per share. Analysts expect FFO of $2.13 per share.

Shares of HCP fell 25 cents to $29.72 in afternoon trading.