Public Storage EPS Surpasses Estimates; Shares Decline

LONDON – Public Storage reported strong second-quarter earnings, with adjusted earnings per share (EPS) reaching $2.66, outperforming analysts’ expectations of $2.59.

However, shares of the self-storage company declined by 1.4% following the announcement, indicating investor apprehension that wasn’t immediately clear.

The company’s quarterly revenue totaled $1.17 billion, slightly above the consensus estimate of $1.16 billion. Despite this positive financial performance, the stock’s reaction remained negative.

President and CEO Joe Russell emphasized the organization’s strategic initiatives, such as enhanced operational efficiencies and record development volumes. He noted that while many areas met or exceeded expectations, customer move-in rents were affected by heightened competition in the industry.

Russell expressed optimism about the company’s future, citing signs of stabilization and the repurchase of $200 million in common shares.

Compared to the same quarter last year, Public Storage’s net income attributable to common shareholders fell by $59.9 million, and EPS dropped by $0.34. This downturn was linked to increased depreciation, amortization, and interest expenses, although it was partially mitigated by a rise in self-storage net operating income and gains from foreign currency exchange.

The company’s same-store facilities experienced a 1.0% revenue decline, amounting to $9.8 million year-over-year, primarily due to reduced annual rent per occupied square foot and lower occupancy rates. In contrast, non-same-store facilities provided a $39.5 million increase in net operating income, driven mainly by acquisitions and the occupancy of newly developed and expanded sites.

Public Storage did not offer specific guidance for the upcoming quarters, but management indicated a cautious outlook for 2024 due to fluctuations in market rent. The company has also undertaken recent financial activities, including the issuance of €150 million in senior notes and a $1.0 billion public offering of senior notes, as part of its efforts to bolster its financial standing.