Summary
Public Storage (PSA) reported solid performance for the first quarter ended March 31, 2018. The company demonstrated revenue growth, driven primarily by increases in rental income from its self-storage facilities, both from stabilized (Same Store Facilities) and newly acquired/developed properties (Non Same Store Facilities). While occupancy rates remained strong, growth in same-store revenues showed a slight deceleration compared to previous periods, attributed to softer demand and increased competition in some markets. The company also reported an increase in operating expenses, particularly property taxes and payroll, impacting margins slightly. Financially, Public Storage maintained a strong balance sheet with substantial liquidity, including significant cash on hand and available credit. The company continued its development and acquisition strategy, with a substantial pipeline of new projects underway. Despite some foreign currency headwinds impacting reported net income, the underlying operational performance remained robust, leading to an increase in diluted earnings per share and Funds from Operations (FFO).
Financial Highlights
35 data points| Revenue | $669.92M |
| Cost of Revenue | $192.83M |
| Gross Profit | $477.10M |
| Operating Expenses | $350.43M |
| Operating Income | $327.60M |
| Interest Expense | $8.11M |
| Net Income | $343.00M |
| EPS (Basic) | $1.66 |
| EPS (Diluted) | $1.65 |
| Shares Outstanding (Basic) | 173.89M |
| Shares Outstanding (Diluted) | 174.15M |
Key Highlights
- 1Total revenues increased by 3.9% to $669.9 million for the three months ended March 31, 2018, compared to $645.5 million for the same period in 2017.
- 2Net income allocable to common shareholders was $287.8 million, or $1.65 per diluted share, an increase from $281.1 million, or $1.62 per diluted share, in the prior year's quarter.
- 3Same Store Facilities revenue grew by 2.1% year-over-year, driven by a 3.0% increase in realized annual rental income per occupied square foot.
- 4Funds From Operations (FFO) per diluted share increased by 1.3% to $2.37, compared to $2.34 in the prior year.
- 5The company has a significant development pipeline with approximately 5.0 million net rentable square feet planned at an estimated cost of $661.9 million.
- 6Cash and equivalents stood at $363.0 million as of March 31, 2018, with strong liquidity supported by a $500 million revolving credit facility with no outstanding borrowings.
- 7The company experienced a foreign currency exchange loss of $11.8 million, primarily due to Euro-denominated debt, impacting net income.