Summary
Public Storage (PSA) reported solid financial results for the second quarter and first six months of 2016, demonstrating continued growth in its core self-storage operations. Net income allocable to common shareholders increased year-over-year, driven by strong growth in self-storage net operating income, both from stabilized "Same Store Facilities" and newly acquired/developed "Non Same Store Facilities." The company also reported an increase in Funds From Operations (FFO) per share, a key metric for REITs, reflecting the operational improvements and expansion efforts. PSA maintains a strong liquidity position with substantial capital resources available to fund its ongoing development pipeline, potential acquisitions, and debt redemptions. The company continues its growth strategy through both acquisitions and development, anticipating significant investment in its portfolio. While facing some localized market softness, management is actively implementing strategies to address these challenges and remains optimistic about future revenue growth.
Financial Highlights
35 data points| Revenue | $634.19M |
| Cost of Revenue | $172.00M |
| Gross Profit | $462.18M |
| Operating Expenses | $297.34M |
| Operating Income | $336.85M |
| Interest Expense | $1.38M |
| Net Income | $356.66M |
| EPS (Basic) | $1.62 |
| EPS (Diluted) | $1.61 |
| Shares Outstanding (Basic) | 173.09M |
| Shares Outstanding (Diluted) | 174.00M |
Key Highlights
- 1Net income for the three months ended June 30, 2016, increased to $280.8 million ($1.61 per diluted common share), up from $263.9 million ($1.52 per diluted common share) in the prior year.
- 2Self-storage net operating income (NOI) saw a significant increase of 8.3% for the quarter and 10.2% for the six months, driven by revenue growth in both Same Store and Non Same Store Facilities.
- 3Funds From Operations (FFO) per diluted common share increased by 8.8% to $2.34 for the quarter and 9.1% to $4.43 for the six months, demonstrating strong operational performance.
- 4The company is actively expanding its portfolio, acquiring 24 self-storage facilities for $197.6 million in the first six months of 2016, with 21 more under contract post-period.
- 5Development projects in progress are expected to add approximately 4.9 million net rentable square feet at a total cost of $630.7 million, indicating continued investment in future growth.
- 6Liquidity remains strong, with approximately $1.4 billion in capital resources available, exceeding estimated capital needs of $1.1 billion for the next year.
- 7The company experienced some localized market softness in areas like Houston, Denver, Chicago, New York, and Washington D.C., leading to increased marketing spend and promotional discounts.