PSA Zooms Ahead of Estimates - Analyst Blog

By
A A A

Public Storage ( PSA ), a top real estate investment trust (REIT) operating self-storage facilities, reported fourth quarter 2011 FFO (funds from operations) of $1.50 per share, compared with $1.33 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 fourth quarter 2011 was $1.66 per share compared with $1.45 in the year-ago quarter. Recurring FFO for fourth quarter 2011 exceeded the Zacks Consensus Estimate by 7 cents.

For full year 2011, Public Storage reported FFO of $5.67 per share, compared with $4.72 in the previous year. Recurring FFO for fiscal 2011 was $5.93 per share compared with $5.22 in 2010. Fiscal 2011 recurring FFO surpassed the Zacks Consensus Estimate by 15 cents.

During the reported quarter, Public Storage recorded a healthy increase in total revenues to $444.7 million from $417.8 million in the year-earlier quarter. Total revenues for the reported quarter were well ahead of the Zacks Consensus Estimate of $422 million. For full year 2011, the company reported total revenues of approximately $1.75 billion compared to $1.64 billion in the previous year.

Total same-store revenues increased 5.0% year-over-year to $382.3 million during the quarter, while net operating income climbed 6.1% to $278.7 million. The increase in same-store revenues was primarily due to a 1.3% increase in average occupancy and a 3.4% rise in realized annual rent per occupied square foot. Occupancy in the same-store portfolio was 90.2% at quarter-end versus 89.0% in the prior-year period. Realized annual rent per occupied square foot increased from $12.79 in the year-earlier quarter to $13.22 in the reported quarter.

Public Storage currently has a 49% stake in Shurgard Europe, which has interests in 188 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 quarter, Public Storage acquired 2 self-storage facilities spanning across 155,000 square feet of rentable space for $16.0 million. The properties were located in California and Texas. The company also acquired the remaining ownership interests in 2 consolidated partnerships for $6.3 million in cash. In addition, during the reported quarter Public Storage entered into a contract to acquire a portfolio of 6 self-storage properties (2 in Florida and 1 each in California, Massachusetts, New Jersey and Pennsylvania) for an aggregate purchase price of $42 million in cash.

With superior quarterly and fiscal results that witnessed a healthy increase in both revenues and earnings, the company increased its quarterly dividend for first quarter 2012 by 16% to $1.10 per share. Funds from operations available for distribution ( FAD ) among common shareholders exceeded the regular common distributions by $113.2 million during the quarter. At year-end 2011, Public Storage had $139.0 million of cash compared to $456.3 million in the year-ago period.

We maintain our 'Neutral' rating on the stock, which presently has a Zacks #2 Rank, translating into a short-term 'Buy' rating. We also have a 'Neutral' recommendation and a Zacks #2 Rank for Sovran Self Storage Inc. ( SSS ), one of the competitors of Public Storage.


 
PUBLIC STORAGE ( PSA ): Free Stock Analysis Report
 
SOVRAN SLF STOR ( SSS ): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: FAD , PSA , SSS

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

55,414,702
  • $15.38 ▼ 0.39%
38,503,210
  • $66.34 ▲ 2.26%
36,466,704
  • $8.36 ▼ 9.52%
35,253,294
  • $26.55 ▲ 1.34%
32,752,347
  • $6.55 ▲ 1.87%
31,778,001
  • $95.22 ▲ 0.19%
28,396,556
  • $51.49 ▼ 0.62%
23,800,987
  • $42.09 ▲ 0.97%
As of 7/11/2014, 04:03 PM