Brookfield Asset Management Inc (BAM)

[Investorman]

UPDATE 1-Brookfield Asset's profit slumps on depreciation
Fri Nov 2, 2007 9:02am EDT
(In U.S. dollars unless noted)

TORONTO, Nov 2 (Reuters) - Brookfield Asset Management (BAMa.TO: Quote, Profile, Research) (BAM.N: Quote, Profile, Research) said on Friday its third-quarter profit dropped by a sharp 62 percent due to depreciation on newly acquired assets.

Brookfield earned $93 million, or 13 cents a share, in the quarter ended Sept. 30, down from a profit of $245 million, or 40 cents a share, a year earlier.

Depreciation in newly acquired assets crimped income by $76 million in the quarter, the company said.

Profits were also hurt by lower output at its power generation operations amid abnormally low water conditions, continued weakness in the U.S. housing market, and an industry strike in the Canadian coastal forest products sector, Brookfield said.

Cash flow from operations, a closely watched measure by real estate firms, slipped to $321 million, or 52 cents a share, from $368 million, or 60 cents a share.

Still, Brookfield said it was on target to achieve its highest-ever yearly cash flow.

Revenue at Brookfield, an asset manager with interests in real estate and power generation, grew to $2.219 billion from $1.405 billion.

The company declared a dividend of 12 cents per class A common share, payable on Feb. 29, 2008, as well as the regular monthly and quarterly dividends on its preferred shares.

Brookfield closed the sale of its shares in Stelco Inc to U.S. Steel Corp (X.N: Quote, Profile, Research) on Oct 31. The company said it realized proceeds of nearly eight times its original investment and expects to record a pretax gain of about $250 million in the fourth quarter of 2007.

The company said it will also record a substantial gain of about $160 million in the fourth quarter from the initial public offering of the major Brazilian stock exchange, Bovespa, in which it owned seats which were converted to shares.