Vornado Realty Trust, the third-biggest US real estate investment trust by market value, said fourth-quarter earnings excluding items rose as revenue climbed and it had a gain on its investment in retailer J.C. Penney Co.

Funds from operations increased to $335.8 million, or $1.76 a share, from $20,000, or zero on a per-share basis, a year earlier, the New York-based REIT said yesterday in a statement. Analysts projected FFO of $1.53 a share.

A rise in earnings from Vornado’s retail operations bolstered revenue as income from office properties “slipped modestly,” Ross Smotrich, an analyst at Barclays Capital said yesterday in a research note. Vornado gets a majority of its revenue from its New York and Washington office buildings.

“The retail portfolio performed well during the holiday season,” said Smotrich, who rates Vornado shares “overweight.”

Fourth-quarter revenue rose to $713 million from $706.6 million a year earlier. Rental revenue climbed 5 percent to $585 million, led by a 13 percent increase in retail rentals to $121.2 million.