Public Storage Puts Up Mixed First Quarter Results

Image: Public Storage is working hard to return to levels reached in early 2022.

By Brian Nelson, CFA

On April 30, Public Storage (PSA) reported mixed first-quarter results that showed a modest beat on the top line and a slight miss when it came to funds from operations [FFO]. For the three months ended March 31, net income came in at $2.60 per diluted share, which compares to $2.65 per share in the year-ago period. Higher depreciation and amortization expense as well as higher interest expense more than offset strength in self-storage net operating income.

Management was upbeat in the press release:

With first quarter performance in-line with our expectations, the Public Storage team is encouraged as we approach the busy season. Our view is supported by positive trends in customer behavior and waning deliveries of competitive new supply across the country. The Public Storage team continues to deploy the powerful combination and competitive advantages tied to our brand, platform, and balance sheet. As a result, we are driving stabilizing trends in our portfolio, including re-accelerating revenue growth month-over-month in an increasing number of our markets. 

FFO came in at $4.24 per share during the first quarter, a nice increase from the $3.94 it put up during the same period a year ago. Core FFO, however, was roughly flat at $4.03 per share versus $4.08 in last year’s quarter, with the decline due in part to foreign exchange headwinds. Looking to 2024, Public Storage’s net operating income growth is targeted in the range of -2.4% to 0.7%, while core FFO per share is expected between $16.60-$17.20, a change of -1.7% to 1.8% from 2023 core FFO per share. We continue to like Public Storage as a key REIT income idea.

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