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Thursday, Aug 18, 2022
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Costs Hit Public Storage

Shares of Public Inc. fell Friday following first quarter earnings that missed analysts’ expectation as the company continues to spend money to broaden its storage empire. The Glendale operator of storage facilities reported funds from operations of $1.74 a share for the quarter ended March 31, compared to $1.57 a share for the same period a year earlier. FFO is a key REIT metric that adds amortization and depreciation expenses back into net income to get a better picture of cash flow. Revenue rose 10 percent to nearly $520 million. Analyst had expected FFO of $1.86 on revenue of $483 million, according to Thomson Financial. The company’s net income was $174.1 million ($1.01), compared to $161.9 million (94 cents) in the same period a year earlier. During the quarter, Public Storage completed two new facilities and one expansion project adding 335,000 net rentable square feet at a cost of about $40 million. In addition, the company has projects underway that will add about 1.9 million net rentable square feet of storage at a cost of roughly $195 million. A total of $38 million in costs were incurred for the projects during the first quarter. Also, the company declared a quarterly dividend of $1.40 a common share, payable on June 30 to shareholders of record as of June 13. Public Storage had interests in 2,202 self-storage facilities in 38 states with 141 million net rentable square feet as of March 31. In addition, the company has a 42 percent equity interest in PS Business Parks Inc., which owns and operates primarily flex, multitenant office and industrial space. Shares closed down $5.65, or 3.2 percent, to $170.54 on the New York Stock Exchange.

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