Back to top

Analyst Blog

Public Storage (PSA - Analyst Report), a leading real estate investment trust (REIT) operating self-storage facilities, reported first quarter 2012 FFO (funds from operations) of $1.35 per share, compared with $1.48 in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Excluding several non-recurring items, FFO for first quarter 2012 was $1.44 per share compared with $1.28 in the year-ago quarter. Recurring FFO for first quarter 2012 beat the Zacks Consensus Estimate by 2 cents.

During the reported quarter, Public Storage recorded an increase in total revenues to $442.6 million from $419.7 million in the year-earlier quarter. Total revenues for the reported quarter were well ahead of the Zacks Consensus Estimate of $424 million.

Same-store revenues increased 4.8% year-over-year to $383.9 million during the quarter, while net operating income climbed 6.3% to $253.2 million. The increase in same-store revenues was primarily due to a 0.6% increase in average occupancy and a 4.1% rise in realized annual rent per occupied square foot.

Occupancy in the same-store portfolio was 90.3% at quarter-end versus 89.8% in the prior-year period. Realized annual rent per occupied square foot increased from $12.65 in the year-earlier quarter to $13.17 in the reported quarter.

Public Storage currently has a 49% stake in Shurgard Europe, which has interests in 189 facilities (10 million net rentable square feet) located in 7 Western European countries. Public Storage is also the managing member of the JV that owns Shurgard Europe.

During the reported quarter, Public Storage acquired 6 self-storage facilities spanning 532,000 square feet of net rentable space for $42 million. The properties were located in California, Florida, Massachusetts, New Jersey and Pennsylvania. In addition, Public Storage acquired the remaining ownership interests in 3 consolidated partnerships for approximately $19.9 million in cash and assumed an existing debt of $4.8 million. The company is also currently under negotiations to acquire 4 facilities (316,000 net rentable square feet, 2 in California and 1 each in New York and Florida) for approximately $46 million in cash.

During first quarter 2012, the company replaced its erstwhile credit facility with a new credit facility with a borrowing capacity of $300 million and scheduled to mature in March 2017. At quarter-end, Public Storage had $620.1 million of cash and cash equivalents. The company maintained its quarterly dividend at $1.10 per share. Funds from operations available for distribution (FAD) among common shareholders exceeded the regular common distributions by about $49.3 million during the quarter.

We maintain our ‘Neutral’ rating on the stock, which presently has a Zacks #3 Rank, translating into a short-term ‘Hold’ rating. We also have a ‘Neutral’ recommendation and a Zacks #3 Rank for Sovran Self Storage Inc. (SSS - Snapshot Report), one of the competitors of Public Storage.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%