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PS Business Parks (PSB) Down 30.5% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for PS Business Parks (PSB - Free Report) . Shares have lost about 30.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is PS Business Parks due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

PS Business Parks Q4 FFO and Revenues Beat Estimates

PS Business Parks reported fourth-quarter 2019 core FFO per share of $1.65, which exceeded the Zacks Consensus Estimate of $1.63. The figure remains flat, year over year.    

Results highlight improvement in same-park NOI, backed by growth in rental rates, as well as higher NOI from non-same-park and multi-family assets.

Rental income came in at around $106.2 million, marking 2% growth from the year-ago quarter.

For full-year 2019, core FFO per share came in at $6.78, higher than the prior-year tally of $6.47. Rental income for the year came in at 429.8 million, up 3.9% year on year.

Quarter in Detail

Same-park rental income was up 6.6% year over year to $97.6 million, while same-park NOI climbed 6.1% to $70.3 million on improving rental rates.

Same-Park revenue per occupied-square-foot increased 7.8% to $16.10. However, weighted average square-foot occupancy shrunk 100 basis points year on year to 94.4%.

Portfolio Activity

During the fourth quarter, PS Business Parks completed the sale of three business parks in Montgomery County, MD — Metro Park North, Meadow Business Park and WesTech Business Park. These parks comprised 128 buildings, aggregating 1.3 million square feet of space, and were sold for $148.8 million.

Further, the company  acquired a muti-tenant flex park — San Tomas Business Center —comprising roughly 79,000 rentable square feet in Santa Clara, CA, for  $16.6 million.

Liquidity

PS Business Parks exited fourth-quarter 2019 with cash and cash equivalents of $62.8 million, up from the $37.4 million reported at the end of 2018.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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