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Shopping mall operator Simon Property ups outlook

INDIANAPOLIS (AP) -- A key profitability measure for Simon Property Group Inc. climbed 14 percent in the first quarter, topping expectations, as both occupancy rates and rents grew for the shopping mall operator.

The Indianapolis company also raised its expectations for 2013 on Friday.

In the first quarter, Simon recorded funds from operation, or FFO, of $741.9 million, or $2.05 per share. That compares with $648.7 million, or $1.82 per share in last year's quarter.

Analysts expected, on average, FFO of $2.01 per share, according to FactSet.

FFO is the preferred profit measure of real estate investment trust like Simon Property. It adds back charges that measure the costs and declining values of equipment and property back to net income.

Simon Property owns or has an interest in 327 retail properties in North America and Asia. The company said its U.S. mall occupancy rate climbed to 94.7 percent from 93.6 percent. Fixed rents, the company's largest form of revenue, rose 11 percent to $777.9 million.

Simon Property increased its FFO forecast for the year by 10 cents, to a range between $8.50 and $8.60 per share. Analyst expect, on average, $8.59 per share.

In the first quarter, Simon Property's net income sank 56 percent to $283.1 million, or 91 cents per share. Last year the company recorded a larger gain from selling, buying and revaluing its properties. Revenue rose nearly 9 percent to $1.22 billion, beating analysts' prediction of $1.18 billion.

The company raised its per-share earnings forecast by 15 cents, to $3.70 to $3.80. Analysts expect $3.71 per share.

The company's stock dipped 4 cents to $175.97 in midday trading Friday. Shares earlier peaked at $177.24, a record high for Simon Property stock.