Prologis Swings to Third-Quarter Profit

   By Angela Chen 
 

Prologis Inc. swung to a third-quarter profit, while its funds from operations--a key industry metric--improved more than expected.

The current Prologis was formed in June 2011, when the nation's two biggest publicly traded warehouse owners--Prologis and AMB Property Corp.--merged in one of the largest real-estate deals since the recession. The San Francisco-based real-estate investment trust has continued to benefit from a rental rebound that has raised occupancy rates and profits on its U.S. warehouses.

The company narrowed its guidance for its funds from operations for the year, excluding gains and losses from property acquisitions or dispositions. Prologis put the range at $1.85 to $1.86 a share, from $1.82 to $1.86.

Overall, Prologis reported a quarterly profit of $137.9 million, compared with a year-earlier loss of $5.4 million. On a per-share basis, which reflects the impact of preferred dividend payments, the profit was 23 cents, compared with a year-earlier loss of 2 cents.

Core funds from operations improved to 48 cents a share from 41 cents. Revenue fell 1.9% to $415.2 million, while rental revenue fell 4.4% to $355.8 million.

Analysts polled by Thomson Reuters expected per-share earnings of 9 cents, funds from operations of 46 cents, and revenue of $399 million.

As of the end of the quarter, the occupancy rate was 95%, up 1.1% from last year and 0.4% from the previous quarter. Tenant retention was 83.9% and rental rates on leases signed during the quarter were 9.7% higher than prior rents.

Write to Angela Chen at [e-mail]

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