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Stronger Operating Results Outweigh Additional Sales for Prologis Say Analysts

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San Francisco-based Prologis Inc., the global leader in logistics real estate, recently reported results for the first quarter of 2018. Net earnings per diluted share was $0.68 compared with $0.38 for the same period in 2017. Core funds from operations per diluted share was $0.80 compared with $0.63 for the same period in 2017. The company’s first quarter 2018 results included net promote income of $0.09 per diluted share.

According to analyst firm BTIG, the report was higher than the analysts’ estimate. “Prologis has accelerated its non-core disposition program and projects and additional $275 million of net negative external investment,” BTIG explains in its analysis. “We continue to see a long runway for growth and maintain out Buy rating on Prologis’ shares.”

According to Hamid Moghadam, chairman and CEO of Prologis, “Earlier this year, we established sector-leading 2018 guidance, and our quarterly results reflect the first step in delivering on that plan. Market conditions remain extremely healthy and our strategy is set. Going forward, it’s all about execution.”

The company ended the quarter with leverage of 24.1% on a market capitalization basis, debt-to-adjusted EBITDA* of 4.2x and more than $3.6 billion of liquidity.

“We continue to lower our weighted average cost of debt, which is now 2.8%,” adds Thomas S. Olinger, chief financial officer, Prologis. “During the quarter, we issued a two-year €400 million note at an all-in effective rate of negative 10 basis points, demonstrating our ability to opportunistically source capital globally.”

He explains that the Q1 numbers exceeded expectations. “The combination of strong operations and higher net promote income has led us to raise the midpoint of our full-year guidance ranges for both earnings and same store NOI.”