By Erin McCarthy
Prologis Inc. (PLD) said its first-quarter profit declined 98%
as the company reported a decline in rental revenue and an
unfavorable comparison to the prior year's quarter.
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 real-estate investment trust, based in San Francisco, has
continued to benefit from a rental rebound that has raised
occupancy rates and profits on its U.S. warehouses.
Standard and Poor's Ratings Services raised the company's debt
ratings to triple-B-plus from triple-B in March, citing its tighter
business strategy and lower financial risk.
For 2014, the company raised the lower end of its adjusted
per-share estimate for funds from operations, a key measure of
performance for REITs, to $1.76 to $1.82, from its previous
estimate of $1.74 to $1.82.
The warehouse real-estate investment trust completed $1.2
billion in contributions and dispositions of buildings and land in
the first quarter.
Prologis reported a profit of $6.8 million, down from $284.8
million a year earlier. On a per-share basis, which reflects
preferred-stock effects, the profit was 1 cent, compared with 57
cents a share a year earlier.
The latest reporting period also included a net loss of $23.3
million from foreign currency and derivative losses, related
amortization and other expenses. The prior year's quarter included
$338.8 million in net gains on acquisitions and dispositions of
investments in real estate.
Revenue declined 11% to $434.7 million. Rental revenue dropped
15% to $388.2 million.
Core funds from operations, which excludes items such as gains
and losses from property acquisitions or dispositions, rose to 43
cents a share from 40 cents.
Analysts polled by Thomson Reuters recently expected per-share
FFO of 43 cents and rental revenue of $393.3 million.
As of the end of the quarter, the occupancy rate was 94.5%, up
from 93.7% reported a year earlier. Tenant retention was 84.6% and
rental rates on leases signed during the quarter were 7% higher
than prior rents.
Write to Erin McCarthy at erin.mccarthy@wsj.com
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