Post Earnings Coverage as Prologis’ Revenue and FFO Numbers Exceeded Market Expectations

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Upcoming AWS Coverage on Rexford Industrial Realty Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 21, 2017 / Active Wall St. announces its post-earnings coverage on Prologis, Inc. (NYSE: PLD). The Company disclosed its first quarter fiscal 2017 results on April 18, 2017. The industrial real estate developer reported a y-o-y increase in both revenue and FFO and also increased its outlook. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Prologis’ competitors within the REIT – Industrial space, Rexford Industrial Realty, Inc. (NYSE: REXR), is estimated to report earnings on May 03, 2017. AWS will be initiating a research report on Rexford Industrial Realty following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on PLD; touching on REXR. Get our free coverage by signing up to: http://www.activewallst.com/register/.

Earnings Reviewed

For the three months ended March 31, 2017, Prologis generated revenues of $629 million, up 4% compared with the year-ago number of $606 million. The Company’s revenue numbers topped analysts’ consensus of $589.1 million.

For Q1 2017, Prologis’ net earnings per diluted share were $0.38 compared with $0.39 for the same period in 2016. The Company’s Core funds from operations (FFO) per diluted share were $0.63 in the reported quarter compared with $0.61 for Q1 2016. The Company’s reported numbers outperformed Wall Street’s estimates for FFO of $0.62 per share.

Highlights

During Q1 2017, Prologis’ leased over 39 million square feet, down compared to last year as the Company has less space available for leasing. Prologis’ global occupancy at the end of the reported quarter was 96.6%, an increase of 50 basis points on a y-o-y basis. Notably, occupancy in Europe increased 180 basis points over the same period to 96.7%.

For Q1 2017, Prologis’ share net effective rent change on rollover was 19.6%. The US was 29.2%, an all-time high and the fifth consecutive quarter above 20%. The Company’s shared net effective same-store NOI growth was 5.8% for Q1 2017, driven by higher re-leasing spreads and a pickup in average occupancy. The US led the way with same-store NOI growth of 7.1%. The Company’s same-store pool includes development completions that are available for lease. Excluding these development assets, Prologis’ same-store was 5.1% on a global basis for the reported quarter.

During the reported quarter, Prologis sold its investment in European logistics venture, generating 84 million in proceeds. Simultaneously, the Company combined the $600 million venture into its targeted European logistics fund, resulting in a vehicle with $3.2 billion in assets. In the UK, Prologis formed a new $1.3 billion development to [whole] venture, generating $213 million in proceeds. In the US, the Company acquired its partners’ remaining equity interest in the Company’s North American industrial fund (NAIF), for $710 million and currently own 100% of this $3 billion vehicle. Finally, Prologis acquired an additional 25% interest in the Company’s Brazilian platform for $80 million and currently owns 50%. The Company is expecting to recapitalize its ownership in NAIF over time, providing it with approximately $1.8 billion of future incremental liquidity.

Financing Activity

Prologis ended Q1 2017 with liquidity of $3.8 billion. During the reported quarter, the Company and its co-investment ventures completed $900 million of financings, including recasting its ¥50 billion-yen revolver at 40 basis points over yen LIBOR and a ¥12 billion term loan at a fixed rate of 95 basis points with a term of over 10 years.

Guidance

Prologis increased its forecast for FY17 occupancy to range between 96% and 97%. The Company also increased and narrowed the range for same-store NOI growth to between 4.5% and 5.25%. For strategic capital, the Company now expects net promote income for FY17 to range between $0.12 and $0.14 per share. With the strength in operations, higher promote and higher deployment, Prologis increased and narrowed its FY17 core FFO range by $0.10 at the midpoint to between $2.72 and $2.78 per share. The components of the raise are driven by $0.06 from promotes, $0.04 from operations, $0.01 to $0.02 from net deployment timing, offset primarily by slower development leasing in Brazil. The Company’s revised guidance represents a year-over-year increase of 7% at the midpoint, or 8% higher, excluding promotes.

Stock Performance

At the closing bell, on Thursday, April 20, 2017, Prologis’ stock was marginally up 0.42%, ending the trading session at $54.53. A total volume of 2.34 million shares were traded at the end of the day. In the last month and previous twelve months, shares of the Company have surged 8.17% and 25.26%, respectively. Moreover, the stock gained 4.22% since the start of the year. The Company’s shares are trading at a PE ratio of 24.10 and have a dividend yield of 3.23%. At Thursday’s closing price, the stock’s net capitalization stands at $28.88 billion.

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