Denver-based ProLogis, the largest U.S. real estate investment trust focused on industrial sites, said third-quarter earnings rose 29 percent on a boost in rental revenue as the company increased development in Europe and Asia.
Net income rose to $166.3 million, or 65 cents a share, from $129.4 million, or 63 cents, a year earlier, Denver-based ProLogis said today in a statement. Rental income rose 58 percent to $243.9 million from $154.3 million. Shares gained as much as 1.7 percent as the company beat analyst forecasts.
The company completed $552 million of development in the third-quarter, almost half of it in Europe, plus another one-third in Japan, China and other Asian countries.
Development was up 33 percent by dollar amount, according to today’s earnings statement.
“We’re in that rare place, where all three continents we’re on are doing very well,” said Melissa Marsden, Prologis senior vice president for investor relations. “Business has improved globally. Our North American operations are a bigger part of our base, but our international operations are growing at a faster pace.” ProLogis in the third quarter acquired five industrial parks in Mexico City and Guadalajara, Mexico, for $238 million in cash and assumed debt to take advantage of the country’s expanding middle class and increased consumption of consumer goods. It also bought four distribution centers in Atlanta for $60 million.
The company’s funds from operations, a measure of cash flow used by real estate investment trusts, rose 27 percent to $202.1 million, or 79 cents a share, from $159.4 million, or 78 cents, a year earlier. ProLogis also increased its forecast funds from operations this year to $3.55 to $3.65 per share.
It forecast funds from operations next year of $3.80 to $4 per share.
On that basis, which doesn’t comply with generally accepted accounting principles, results beat the 78-cent estimate by Banc of America Securities LLC’s Ross Nussbaum, StarMine Inc.’s a top- rated analyst for estimating ProLogis’s earnings. His estimate was higher than the 77-cent average estimate of 16 analysts surveyed by Thomson Financial.
ProLogis shares were up 92 cents to $62.60 at 10:38 a.m. (EST) in New York Stock Exchange composite trading. Earlier they were as high as $62.74. They have gained 34 percent this year, compared with a 25 percent increase in the Bloomberg REIT Index.
The results were announced before the start of regular U.S. trading.
ProLogis European Properties, the owner of Europe’s largest network of warehouse distribution centers, said its third-quarter earnings fell 57 percent to 6.8 million euros ($8.6 million) after one-time costs related to the fund’s initial public offering last month, when it raised 715 million euros.
ProLogis owns 24 percent of the fund, which it set up in 1999 and which has assets of 4.2 billion euros across 281 warehouse and distribution centers with 5.4 million square meters (58.1 million square feet) of space.
ProLogis European Properties was trading 5 cents lower at 14.70 euros in Amsterdam. The stock has risen 2.5 percent since the IPO.
