Prologis Q1 Profit Plunges, Core FFO Up; Lifts FY14 View - Update

(RTTNews) - Prologis Inc. (PLD), an operator of industrial real estate, Tuesday reported a sharp fall in first-quarter profit, citing mainly lower level of gains on contributions and disposition of operating properties. The company also raised the lower end of its core FFO per share outlook for full year 2014.

Hamid Moghadam, chairman and CEO of the company said, "We started the year with excellent momentum as strong market fundamentals drove demand for our product, leading to the fifth-consecutive quarter of rent growth."

For the first quarter, net earnings attributable to stockholders plunged to $4.67 million or $0.01 per share from $265.42 million or $0.57 per share in the previous year.

The company had recorded gains on acquisitions and dispositions of investments in real estate of $338.84 million in the prior-year quarter.

Core funds from operations, or core FFO increased to $217.56 million from $187.94 million last year. Core FFO per share was $0.43, while the firm posted $0.40 per share a year earlier.

Revenues for the quarter decreased to $434.68 million from $490.62 million a year ago.

Same-store net operating income, or NOI, increased 3 percent, or 4.1 percent on an adjusted cash basis. The company said this increase was driven by higher occupancy and increasing rental rents.

Prologis ended the quarter with 94.5 percent occupancy in its operating portfolio, up 80 basis points over the same period in 2013. Tenant retention was 84.6 percent, up 660 basis points from last year.

Rental rates on leases signed in the quarter increased 7 percent from prior rents, compared to an increase of 2 percent in the same quarter a year ago.

For full year 2014, the company now expects core FFO per share to be in the range to $1.76 to $1.82 per share, up from the prior outlook of $1.74 to $1.82 per share.

The company also narrowed its guidance for net earnings to a range of $0.06 to $0.12 per share. Earlier, the firm forecast earnings per share in the range of $0.02 to $0.10.

PLD is currently trading at $41, down 0.94 percent.