By Saabira Chaudhuri
Prologis Inc.'s (PLD) second-quarter profit rose 19% as the
warehouse real-estate investment trust reported fewer one-time
costs, however revenue fell to well below what analysts were
expecting.
For the year, the company narrowed its view for core funds from
operations--a closely watched measure of performance for REITs--now
expecting $1.63 to $1.67 from its prior view of $1.60 to $1.70.
The new Prologis was formed in June 2011 when the nation's two
biggest publicly traded warehouse owners--Prologis and AMB Property
Corp.--merged in one of the largest real-estate deals since the
recession. The San Francisco-based real-estate investment trust has
lately been benefiting from occupancy and rental rate
increases.
For the second quarter, Prologis reported a profit of $2.3
million compared with a profit of $1.9 million a year ago. On a
per-share basis, which reflects the impact of preferred dividends,
the company reported roughly breakeven earnings from a loss of two
cents a share a year ago. Core funds from operations--which exclude
merger-related expenses--were down at 41 cents from 43 cents.
Rental revenue fell 20% to $372.7 million. Analysts polled by
Thomson Reuters most recently projected adjusted FFO of 37 cents
and revenue of $428 million.
The year-ago period included $21.2 million in integration
expenses, while the latest quarter included no such expense.
As of the quarter's end, the occupancy rate was 93.7%,
consistent with the prior quarter.
Rental rates on leases signed in the quarter increased 4% from
prior rents compared with a decrease of 3.8% in the same period
last year.
Shares closed Tuesday at $40.27 and were inactive premarket. The
stock has dropped 5.7% in the past three months.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires