Public Storage (NYSE:PSA) Posts Strong Earnings

Public Storage (NYSE:PSA) stock fell 1.38% (As on August 5, 11:21:19 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 22. For the three months ended June 30, 2022, net income allocable to the common shareholders was $603.4 million compared to $346.2 million, representing an increase of $257.2 million. The increase is due primarily to (i) a $160.9 million increase in self-storage net operating income, (ii) a $114.4 million increase in foreign currency exchange gains primarily associated with the Euro denominated notes payable, (iii) a $21.1 million increase in the equity share of gains on sale of real estate recorded by the unconsolidated real estate entities, and (iv) a $17.0 million decrease in allocations to preferred shareholders with respect to redemption of preferred shares, partially offset by (v) a $46.0 million increase in depreciation and amortization expense and (vi) a $10.9 million increase in interest expense. The $160.9 million increase in self-storage net operating income in the three months ended June 30, 2022 as compared to the same period in 2021 is a result of a $95.7 million increase attributable to the Same Store Facilities and a $65.2 million increase attributable to the Non-Same Store Facilities. Revenues for the Same Store Facilities increased 15.9% or $108.4 million in the three months ended June 30, 2022 as compared to 2021, due primarily to higher realized annual rent per available square foot. Cost of operations for the Same Store Facilities increased by 7.6% or $12.7 million in the three months ended June 30, 2022 as compared to 2021, due primarily to increased property tax expense, on-site property manager payroll expense, marketing expense, other direct property costs, and centralized management costs. The increase in net operating income of $65.2 million for the Non-Same Store Facilities is due primarily to the impact of facilities acquired in 2021 and the fill-up of recently developed and expanded facilities.

PSA in the second quarter of FY 22 has reported the adjusted funds from operations per share of $3.99, beating the analysts’ estimates for the adjusted earnings per share of $3.92, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue of $1.03 billion in the second quarter of FY 22, beating the analysts’ estimates for revenue of by 0.86%.

Moreover, during the three months ended June 30, 2022, the company had acquired ten self-storage facilities (two each in North Carolina and Texas, and one each in Colorado, Florida, Georgia, Maryland, Oregon, and Tennessee) with 0.7 million net rentable square feet for $123.6 million.

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