Prologis ( NYSE: PLD ) Q3 earnings came in stronger than expected Wednesday on higher rental revenue and its solid liquidity position, though the industrial REIT lowered its full-year core FFO guidance due to a more conservative capital allocation strategy.
"Our record results for the quarter point to the continued strength of our business; however, given the impact of aggressive Fed tightening and the rapid change in market sentiment, we will run our company assuming an economic slowdown," said Co-Founder and CEO Hamid R. Moghadam.
For 2022, the company sees core funds from operations of $5.12-5.14, compared with $5.14-5.18 in the prior guidance and $5.07 consensus.
Moreover, contributions are expected to be $800M-900M vs. $1.6B-1.9B in the prior view. Dispositions are seen to be $1.3B-1.4B, down from $1.9B-2.2B in the previous outlook. Similarly, development starts are anticipated to come in at $4.2B-4.6B compared with $4.5B-5B in the prior target. And it expects cash same-store net operating income to be 8.50%-8.75% vs. prior range of 8.25%-8.75%.
Looking at its third-quarter results, core FFO of $1.73 per share topped the average analyst estimate of $1.67 and climbed from $1.04 in the year-ago period.
Revenue of $1.75B easily exceeded the $1.13B consensus estimate and advanced from $1.18B a year earlier.
Q3 adjusted EBITDA of $1.61B gained from $1.1B in Q3 2021.
Average occupancy was 97.7% in Q3. Cash same-store net operating income was 9.3%, an all-time high.
Earlier, Prologis core FFO of $1.73 beats by $0.06, revenue of $1.75B beats by $620M .
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Prologis Q3 earnings top consensus, but softens year core FFO outlook