LONDON - Public Storage (NYSE:PSA) reported a second-quarter earnings beat, with adjusted earnings per share (EPS) of $2.66, surpassing the analyst estimate of $2.59.
Despite this, shares of the self-storage company fell by 1.4% following the announcement, signaling investor concerns that were not immediately disclosed.
The company's revenue for the quarter reached $1.17 billion, marginally exceeding the consensus estimate of $1.16 billion. However, this financial performance did not translate to a positive market response, as reflected in the stock's decline.
President and CEO Joe Russell highlighted the company's strategic initiatives, including improved operating efficiencies and record development volumes. He acknowledged that the quarter met or exceeded expectations in many areas but noted that customer move-in rents were impacted by industry-wide competition.
Russell expressed confidence in the company's future, pointing to signs of stabilization and a strong repurchase of $200 million in common shares.
Compared to the same quarter last year, Public Storage's net income allocable to common shareholders decreased by $59.9 million, and EPS dropped by $0.34. This decline was attributed to increased depreciation, amortization, and interest expenses, partially offset by a rise in self-storage net operating income and foreign currency exchange gains.
The company's same-store facilities saw a revenue decrease of 1.0% or $9.8 million year-over-year (YoY), mainly due to lower annual rent per occupied square foot and a decline in occupancy. Meanwhile, non-same-store facilities contributed a $39.5 million increase in net operating income, primarily from acquisitions and the fill-up of newly developed and expanded facilities.
Public Storage did not provide specific guidance for the upcoming quarters, but the management's outlook adjustment for 2024 suggests caution due to market rent dynamics. The company's recent financial activities, including the issuance of €150 million in senior notes and a $1.0 billion public offering of senior notes, indicate ongoing efforts to strengthen its financial position.
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