Public Storage Q4 FFO Misses Estimates, Same-Store Revenues Fall Y/Y

Public Storage PSA reported a fourth-quarter 2024 core funds from operations (FFO) per share of $4.21, missing the Zacks Consensus Estimate of $4.23. However, the figure increased marginally year over year.See the Zacks Earnings Calendar to stay ahead of market-making news.Results reflect lower same-store revenues year over year, owing to a decline in occupancy. However, a decent increase in realized annual rent per occupied square foot positively impacted the performance. The company also benefited from its expansion efforts through acquisitions, developments and extensions.Quarterly revenues of $1.18 billion matched the Zacks Consensus Estimate. Moreover, revenues increased 1.5% year over year.For 2024, Public Storage reported core FFO per share of $16.67, down 1.3% from the prior year and missed the Zacks Consensus Estimate of $16.70. Revenues of $4.70 billion increased 3.9% year over year.Public Storage Price, Consensus and EPS Surprise Public Storage price-consensus-eps-surprise-chart | Public Storage QuotePSA's Fourth Quarter in DetailPublic Storage’s same-store revenues decreased marginally year over year to $915.6 million in the fourth quarter, highlighting a decline in occupancy partially offset by higher realized annual rent per occupied square foot. This storage REIT witnessed a 0.1% increase in realized annual rental income per occupied square foot to $22.66. However, the weighted average square foot occupancy of 91.8% was down 0.6% year over year. Our estimate was 92.5%.The cost of operations for same-store facilities increased 1.3% year over year to $190 million, mainly due to a rise in property taxes.Consequently, PSA’s same-store direct net operating income (NOI) decreased 1% to $698.7 million. Also, this REIT’s NOI growth from non-same-store facilities was $4.3 million, mainly due to the impact of facilities acquired in 2023.The company achieved a 79.2% same-store direct NOI margin in the quarter, down from 79.7% in the prior-year quarter.PSA’s Portfolio ActivityIn the fourth quarter, Public Storage acquired 17 self-storage facilities, comprising 1.3 million net rentable square feet of area, for $221.2 million.It opened three newly developed facilities and completed several expansion projects with 0.4 million net rentable square feet, costing $80.9 million.As of Dec. 31, 2024, PSA had several facilities in development (expected to contribute around 2.5 million net rentable square feet) estimated to cost $498.9 million and various expansion projects (expected to contribute around 1.5 million net rentable square feet) estimated to cost $242.7 million. It expects to incur the remaining $433.5 million of development costs related to these projects over the next 18 to 24 months.PSA's Balance Sheet PositionPublic Storage exited the fourth quarter of 2024 with $447.4 million of cash and equivalents, down from $599 million as of Sept. 30, 2024.PSA’s 2025 GuidancePSA projects 2025 core FFO per share in the range of $16.35-$17.00. The Zacks Consensus Estimate is currently pegged at $17.22, which lies above the guided range.The company’s full-year assumption is backed by a 1.3% decline to 0.8% growth in same-store revenues, a 2.5% to 4% rise in same-store expenses and a 2.9% decline to 0.2% expansion in same-store NOI.Further, the company expects capital expenditures relating to maintenance of real estate facilities amounting to $150 million, $50 million in energy efficiencies and $370 million in development openings.PSA’s Dividend PayoutOn Feb. 21, 2025, PSA’s board of trustees declared a first-quarter dividend of $3 per share on its common stock. The dividend will be paid out on March 28 to its shareholders of record as of March 13, 2025.PSA’s Zacks RankPublic Storage currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Upcoming Earnings ReleasesWe now look forward to the earnings releases of other REITs like CubeSmart CUBE and Medical Properties Trust MPW, both slated to report on Feb. 27.The Zacks Consensus Estimate for CubeSmart’s fourth-quarter 2024 FFO per share is pegged at 68 cents, implying a year-over-year decrease of 2.9%. CUBE currently carries a Zacks Rank #3.The Zacks Consensus Estimate for Medical Properties Trust’s fourth-quarter 2024 FFO per share is pegged at 16 cents, suggesting a year-over-year decrease of 55.6%. MPW currently carries a Zacks Rank #4 (Sell).Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. 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