RALEIGH — Highwoods Properties, one of the biggest suburban office landlords in the Southeast, said its profitability in 2007 likely rose higher than expected.

The Raleigh real estate investment trust this morning raised its guidance for full-year funds from operation, a profitability measure for REITs, to between $2.75 to $2.78 per share. That’s above the range of $2.67 to $2.74 predicted by Wall Street analysts.

Highwoods previously expected a range of $2.68 to $2.73 per share. The increase was due primarily to higher operating income, income from lease terminations and lower administrative expenses, the company said.

Highwoods’ shares climbed 3.7 percent to $29.93 during midday trading on the New York Stock Exchange. The Bloomberg REIT index was up 2.3 percent.

The guidance may indicate that Highwoods’ fourth-quarter results, to be released Feb. 12, were stronger than expected in the face of a slowing economy, which has caused some companies to reduce demand for office space. It jibes with what analysts have been predicting for public office landlords.

“We expect the U.S. office REITs to report good results in the fourth quarter, but temper their outlooks for the remainder of the year,” REIT analysts at UBS wrote in a note to investors last week. “Management commentary should reflect a more cautious tone toward business conditions for the remainder of 2008 as the magnitude of workforce reductions resulting from weakening economic conditions become more apparent.”

Highwoods expects 2008 funds from operation to land within the range of $2.56 and $2.72 per share. Analysts that follow the company are predicting a 2008 range of between $2.44 and $2.71 per share.

The lower 2008 guidance accounts for fewer expected land-sale gains. The company has been pruning its portfolio, unloading noncore assets and undeveloped land — transactions that padded Highwoods’ FFO in 2007.

Highwoods now shifts its attention to operations: FFO from core operations, which excludes property-sale gains, is expected to increase 6 percent in 2008.