Extra Space Storage (EXR) Q2 FFO and Revenues Increase Y/Y

Zacks Equity Research
·4-min read

Extra Space Storage, Inc. EXR reported second-quarter 2020 core funds from operations (FFO) per share of $1.24. The figure comes in 6.9% higher than the prior-year quarter’s $1.16. The Zacks Consensus Estimate for the same was $1.16.

Results reflect growth in quarterly revenues and higher occupancy customers. However, fall in same-store net operating income (NOI) is a concern.

Quarterly revenues came in at $327.2 million, up 1.1% year over year. Moreover, the revenue figure surpassed the Zacks Consensus Estimate of $322.3 million.

Due to the economic uncertainties related to the coronavirus pandemic and its impact on rentals, pricing and rent increases, the company has opted not to reinstate the 2020 guidance.

Quarter in Detail

Same-store rental revenues declined 3.1% year over year to $262.7 million during the second quarter, while same-store NOI fell 4.6% to $185.5 million. This decline in same-store revenues resulted from lower net rental rates for customers, late fees collected and higher bad debt expense related to non-paying tenants. Same-store square foot occupancy was 94.5% as of Jun 30, 2020, up 100 basis points year on year.

Notably, during the reported quarter, Los Angeles, Norfolk/Virginia Beach, Oklahoma City and Phoenix were the major markets, which registered revenue growth above the company's portfolio average.

Nonetheless, markets including Atlanta, Charleston, Miami and Tampa, performed below the company's portfolio average.

Balance Sheet

Extra Space Storage exited second-quarter 2020, with $56.4 million of cash and cash equivalents, up from the $65.7 million recorded at the end of 2019. The company had $883 millionin revolving line of credit availability as of Jun 30, 2020. As of Mar 31, 2020, the company's percentage of fixed-rate debt to total debt was 79%.

During the June-end quarter, the company did not sell any shares of common stock using its ATM program. Extra Space Storage had $298.6 million available for issuance under its ATM program as of Jun 30, 2020.

Portfolio Activity

During the second quarter, Extra Space Storage, in conjunction with its joint-venture partners and completed one development for a cost of $25.4 million. Of this, the company invested $14.4 million.

Extra Space Storage added 31 stores (gross) to the company’s third-party management platform. As of Jun 30, 2020, it managed 700 stores for third-party owners. Furthermore, with additional 251 stores owned in joint ventures, total stores under management summed 951.

Dividend Update

On Jun 30, the company paid the second-quarter common stock dividend of $0.90 per share to stockholders of record at the close of business on Jun 15, 2020.

Extra Space Storage currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Extra Space Storage Inc Price, Consensus and EPS Surprise

Extra Space Storage Inc Price, Consensus and EPS Surprise
Extra Space Storage Inc Price, Consensus and EPS Surprise

Extra Space Storage Inc price-consensus-eps-surprise-chart | Extra Space Storage Inc Quote

Performance of Other REITs

Apartment Investment and Management Company AIV reported second-quarter 2020 pro-forma FFO of 63 cents per share, surpassing the Zacks Consensus Estimate of 61 cents. Also, the figure improved 5% from the year-ago quarter’s 60 cents.

Vornado Realty Trust VNO delivered second-quarter FFO plus assumed conversions as adjusted of 55 cents per share, missing the Zacks Consensus Estimate of 74 cents. The reported figure also plunged 39.6% year over year.

Mack-Cali Realty Corp’s CLI second-quarter 2020 core FFO per share of 28 cents missed the Zacks Consensus Estimate of 31 cents. Moreover, the figure compared unfavorably with the year-ago quarter’s reported number of 40 cents.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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