We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Prologis' (PLD) Q3 FFO and Revenues Beat, '23 View Raised
Read MoreHide Full Article
Prologis, Inc. (PLD - Free Report) reported third-quarter 2023 core funds from operations (FFO) per share of $1.30, beating the Zacks Consensus Estimate of $1.26. The figure, however, declined 24.9% from the year-ago quarter.
The results of this industrial REIT reflect healthy rent growth. However, lower occupancy and higher interest expenses were undermining factors. PLD also raised the midpoint of its 2023 core FFO per share guidance by a cent.
Shares of the company are trending marginally up during the initial hours of today’s trading session.
Prologis generated rental revenues of $1.78 billion, outpacing the Zacks Consensus Estimate of $1.71 billion. The figure increased a whopping 53.8% from the year-ago period’s $1.15 billion. Total revenues were $1.92 billion, up from the prior-year quarter’s $1.75 billion.
Per Hamid R. Moghadam, the co-founder and CEO of the company, “Our results reflect strong execution by our team and the quality of our global portfolio. That said, until there is more stability in the economy, negative customer sentiment will weigh on demand. We remain focused on capturing our embedded lease mark-to-market, building out our land bank into a favorable future supply environment, and partnering with our customers to address their most critical pain points.”
Quarter in Detail
In the quarter under review, 46.4 million square feet of leases commenced in the company’s owned and managed portfolio, with 42.3 million square feet in the operating portfolio and 4.1 million square feet in the development portfolio. The retention level was 76.8% in the reported quarter.
The average occupancy level in Prologis’ owned and managed portfolio was 97.1% in the third quarter, falling 40 basis points (bps) from the prior quarter and 60 bps from the year-ago quarter. Our estimate for average occupancy was 97.3%.
Prologis’ share of net effective rent change was 84% in the July-September quarter. This marked an all-time high and was led by the United States at 96.6%. The cash rent change of 54.2%, too, represented an all-time high. Consequently, cash same-store net operating income (NOI) grew 9.5%.
The company’s share of building acquisitions amounted to $66 million in the third quarter. Development stabilization aggregated $456 million, while development starts totaled $943 million, with 72.6% being build to suit. PLD’s total dispositions and contributions were $486 million.
However, during the reported quarter, interest expenses jumped significantly on a year-over-year basis to $181.1 million.
Liquidity
Prologis exited the third quarter of 2023 with cash and cash equivalents of $740.8 million, up from $531.1 million at the end of the second quarter of 2023.
Debt, as a percentage of the total market capitalization, was 22.3% as of Sep 30, 2023. The company's weighted average interest rate on its share of the total debt was 2.9%, with a weighted average term of 9.5 years. Prologis and its co-investment ventures issued $1.4 billion of debt in the reported quarter at a weighted average interest rate of 3.2%, with a weighted average term of 5.9 years.
2023 Guidance
Prologis raised its core FFO per share guidance for 2023 to the range of $5.58-$5.60 from $5.56-$5.60 expected earlier, suggesting a cent’s increase at the midpoint. The Zacks Consensus Estimate for the metric is currently pegged at $5.59.
The company now estimates cash same-store NOI (Prologis share) between 9.75% and 10.00%, up 12.5 basis points at the midpoint than what was guided earlier. PLD also raised the lower end of its outlook for average occupancy to 97.25-97.50% from 97.00-97.50% projected earlier.
We now look forward to the earnings releases of other REITs like Crown Castle Inc. (CCI - Free Report) and Equinix (EQIX - Free Report) , slated to report on Oct 18 and Oct 25, respectively. Meanwhile, Boston Properties (BXP - Free Report) is scheduled on Nov 1.
The Zacks Consensus Estimate for Crown Castle’s third-quarter 2023 FFO per share stands at $1.78, indicating a year-over-year fall of 3.78%. CCI currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Equinix’s third-quarter 2023 FFO per share is pegged at $7.79, implying a marginal year-over-year increase. EQIX currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Boston Properties’ third-quarter 2023 FFO per share is pegged at $1.85, suggesting a year-over-year fall of 3.14%. BXP currently carries a Zacks Rank #2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Prologis' (PLD) Q3 FFO and Revenues Beat, '23 View Raised
Prologis, Inc. (PLD - Free Report) reported third-quarter 2023 core funds from operations (FFO) per share of $1.30, beating the Zacks Consensus Estimate of $1.26. The figure, however, declined 24.9% from the year-ago quarter.
The results of this industrial REIT reflect healthy rent growth. However, lower occupancy and higher interest expenses were undermining factors. PLD also raised the midpoint of its 2023 core FFO per share guidance by a cent.
Shares of the company are trending marginally up during the initial hours of today’s trading session.
Prologis generated rental revenues of $1.78 billion, outpacing the Zacks Consensus Estimate of $1.71 billion. The figure increased a whopping 53.8% from the year-ago period’s $1.15 billion. Total revenues were $1.92 billion, up from the prior-year quarter’s $1.75 billion.
Per Hamid R. Moghadam, the co-founder and CEO of the company, “Our results reflect strong execution by our team and the quality of our global portfolio. That said, until there is more stability in the economy, negative customer sentiment will weigh on demand. We remain focused on capturing our embedded lease mark-to-market, building out our land bank into a favorable future supply environment, and partnering with our customers to address their most critical pain points.”
Quarter in Detail
In the quarter under review, 46.4 million square feet of leases commenced in the company’s owned and managed portfolio, with 42.3 million square feet in the operating portfolio and 4.1 million square feet in the development portfolio. The retention level was 76.8% in the reported quarter.
The average occupancy level in Prologis’ owned and managed portfolio was 97.1% in the third quarter, falling 40 basis points (bps) from the prior quarter and 60 bps from the year-ago quarter. Our estimate for average occupancy was 97.3%.
Prologis’ share of net effective rent change was 84% in the July-September quarter. This marked an all-time high and was led by the United States at 96.6%. The cash rent change of 54.2%, too, represented an all-time high. Consequently, cash same-store net operating income (NOI) grew 9.5%.
The company’s share of building acquisitions amounted to $66 million in the third quarter. Development stabilization aggregated $456 million, while development starts totaled $943 million, with 72.6% being build to suit. PLD’s total dispositions and contributions were $486 million.
However, during the reported quarter, interest expenses jumped significantly on a year-over-year basis to $181.1 million.
Liquidity
Prologis exited the third quarter of 2023 with cash and cash equivalents of $740.8 million, up from $531.1 million at the end of the second quarter of 2023.
Debt, as a percentage of the total market capitalization, was 22.3% as of Sep 30, 2023. The company's weighted average interest rate on its share of the total debt was 2.9%, with a weighted average term of 9.5 years. Prologis and its co-investment ventures issued $1.4 billion of debt in the reported quarter at a weighted average interest rate of 3.2%, with a weighted average term of 5.9 years.
2023 Guidance
Prologis raised its core FFO per share guidance for 2023 to the range of $5.58-$5.60 from $5.56-$5.60 expected earlier, suggesting a cent’s increase at the midpoint. The Zacks Consensus Estimate for the metric is currently pegged at $5.59.
The company now estimates cash same-store NOI (Prologis share) between 9.75% and 10.00%, up 12.5 basis points at the midpoint than what was guided earlier. PLD also raised the lower end of its outlook for average occupancy to 97.25-97.50% from 97.00-97.50% projected earlier.
Prologis currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prologis, Inc. Price, Consensus and EPS Surprise
Prologis, Inc. price-consensus-eps-surprise-chart | Prologis, Inc. Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other REITs like Crown Castle Inc. (CCI - Free Report) and Equinix (EQIX - Free Report) , slated to report on Oct 18 and Oct 25, respectively. Meanwhile, Boston Properties (BXP - Free Report) is scheduled on Nov 1.
The Zacks Consensus Estimate for Crown Castle’s third-quarter 2023 FFO per share stands at $1.78, indicating a year-over-year fall of 3.78%. CCI currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Equinix’s third-quarter 2023 FFO per share is pegged at $7.79, implying a marginal year-over-year increase. EQIX currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Boston Properties’ third-quarter 2023 FFO per share is pegged at $1.85, suggesting a year-over-year fall of 3.14%. BXP currently carries a Zacks Rank #2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.