Prologis, the logistics-property developer, is scheduled to release its fourth-quarter results before the market opens on Wednesday. Analysts are eagerly anticipating the company's performance. Here are the key details you need to know:
According to a consensus of 11 analysts polled by FactSet, Prologis is projected to report a profit of $560.7 million for the quarter ended December 31. This represents a slight decline from the $585.8 million profit recorded in the same period last year.
Prologis's revenue is expected to increase to $1.85 billion from $1.59 billion compared to the prior year, as reported by 13 analysts polled by FactSet.
Funds from Operations
Analysts predict that core funds from operations, an operational metric that excludes certain items, will rise to $1.26 per share, up from $1.24 a year ago, according to a poll conducted by FactSet with 21 analysts.
Key Areas to Monitor
Prologis's fourth-quarter results will shed light on two crucial areas:
Occupancy Rates: Over the past two quarters, Prologis has experienced a decline in average occupancy rates, reflecting a slowdown in warehouse demand. The company attributes this decline to weakened economic sentiment. However, industry experts anticipate that lower interest rates later this year could boost customer confidence and revive demand. Prologis's upcoming results will provide insights into current demand levels.
Rent Increases: Despite demand challenges, Prologis has managed to sustain growth by raising rents. In the third quarter, net effective rent increased by 84% overall and nearly 97% in the United States. Investors will closely analyze the fourth-quarter results for indications of the pace at which rents are increasing.