(Adds sales, core FFO, outlook, background)

NEW YORK, April 29 (Reuters) - Mall and land owner General Growth Properties Inc (GGP.N: Quote, Profile, Research) said on Tuesday that funds from operations, a performance measure of real estate investment trusts, fell 54.6 percent compared with a year earlier when the company recorded a large tax benefit.

The company reported first-quarter funds from operations of $223.2 million, or 75 cents per share, compared with $491.7 million or $1.66 per share in the prior year, when the company recognized a tax benefit of $298.2 million, or $1 per share.

The results came in ahead of the average of analysts' forecasts of 74 cents per share, according to Reuters Estimates.

For its retail centers only, the company said first-quarter FFO, or "core" FFO, of $226.6 million, or 76 cents per share, compared with $192.4 million, or 65 cents per share in the year-earlier quarter.

FFO removes the profit-reducing effect that depreciation -- a noncash accounting item -- has on earnings.

"Strong comparable operating results at our malls demonstrate that our business prospects remain positive," Chief Executive John Bucksbaum said in a statement.

"Despite the challenging economic environment, our malls remain a very attractive venue for our customers to shop, for our retailers to do business, and for our lenders to lend," he said.

Last month, General Growth refinanced several properties and cleared $821.9 million from a 22.8 million share offering. The fund-raising helped ease investor fears and quash short-seller chatter about the company's financial health due to the debt it needs to refinance for its 2004 acquisition of Rouse Cos.