Shares of Prologis Inc.
PLD,
rallied 1.0% toward a four-month high in premarket trading Wednesday, after the logistics real estate investment trust (REIT) reported fourth-quarter profit and revenue that beat expectations, even though the full-year outlook was a bit downbeat. Net income fell to $585.8 million, or 63 cents a share, from $1.25 billion, or $1.67 a share, in the year-ago period. Core funds from operations (FFO), which is an earnings measure used by REITs that excludes cost depreciation, asset sales and other nonrecurring items, rose to $1.24 from $1.12 and topped the FactSet consensus of $1.22. Total revenue grew 37.2% to $1.75 billion, well above the FactSet consensus of $1.42 billion, as rental revenue jumped 48.3% to $1.60 billion. Expense growth outpaced revenue growth, rising 43.6% to $1.15 billion. Average occupancy was 98.0%. For 2023, the company expects core FFO of $5.40 to $5.50, below the current FactSet consensus of $5.57, and expects average occupancy of 96.5% to 97.5%. “While capital markets have begun to stabilize, it will likely take a few quarters before we see meaningful price discovery, and normalization of values,” said Chief Executive Hamid Moghadam. The stock has rallied 14.7% over the past three months through Tuesday, while the SPDR Real Estate Select Sector exchange-traded fund
XLRE,
has climbed 11.5% and the S&P 500
SPX,
has tacked on 7.35.
