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LogisticsNews

Prologis posts solid third-quarter numbers as macro tailwinds continue

The Prologis, Inc. (NYSE:PLD) earnings train rolled on in the third quarter seemingly impervious to the economic and geopolitical uncertainty around it.

The world’s largest logistics real estate owner, developer and operator reported October 15 that core funds from operations came in at 97 cents per diluted share, up from 72 cents per share in the year-earlier quarter. The 2019 results exceeded analysts’ average estimates by 4 cents a share, according to Barchart. The results included 18 cents a share of “net promote income” generated by Prologis’ “strategic capital” venture program; it raised a record $1.6 billion in capital for open-ended projects. The 2018 quarter did not have any such income.

The company also boosted full-year core funds guidance to a range of $3.30 to $3.32 a share from $3.26 to $3.30 a share. The consensus estimate had been $3.28 a share. The company will share 2020 guidance at an investor day early next month.

Net earnings per diluted share rose to 71 cents a share compared to 60 cents, the San Francisco-based company said. Revenue of $712 million was up 16.5% year-on-year, though it missed estimates by $3.72 million, according to website Seeking Alpha.

Occupancy rates dipped to 96.5% from 97.5% in the year-earlier period as Prologis emphasized higher rent flows over occupancy, it said. Rents jumped considerably year-on-year, led by the U.S. market, which company executives said remains strong.

With a portfolio of nearly 800 million square feet in 19 countries, Prologis is a proxy of the health of the global industrial real estate market, particularly the portion of the industrial market focusing on logistics. Fundamentals in the United States, Europe and Japan are healthy, company executives said on the analyst call. Rent growth in continental Europe is the strongest it’s been in a decade, executives said. 

Rental rates continue to outperform, and the company has seen no fallout from the various trade disputes, executives said. The same trade-related uncertainty that adversely affects the outlook for some of its transport and logistics customers works to Prologis’ benefit because the lack of clarity often requires businesses to hold additional stock to protect against any changes in the landscape, such as higher tariffs, said Hamad R. Moghadam, Prologis’ CEO.

Executives on the call said there is nothing to indicate a near-term reversal in any of the trends affecting their markets.

Prologis continues to benefit from the growth in e-commerce fulfillment as companies seek industrial locations that are closer to their customers to offset supply chain costs such as labor and transportation. Demand is solid across property types of all sizes, company executives said. Smaller-size properties more suited for e-commerce fulfillment have the best potential for rent growth, company executives said. Those comments dovetail with recent industry projections of strong demand for the smaller buildings that will not resemble the traditional industrial warehouses.

At mid-afternoon, the price of Prologis’ shares had hit a 52-week high of $88.81 a share, up $2.55 a share.

(Editor’s note: Prologis is an investor in FreightWaves)


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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.

4 Comments

  1. Quote:
    “Executives on the call said there is nothing to indicate a near-term reversal in any of the trends affecting their markets. ”

    Bookmark this date . I will boldly state publicly that the “near-term” trend in their share price will snap and reverse and price will descend .

    In my humble opinion …………..

  2. UPDATE !

    Currently we appear to have confirmation that the Prologis share price has begun to correct as mentioned in my prior post was likely to occur in it’s near term trend .

    A gap down in share price is what I consider to be a “snap” in the near term upward price trend . Therefore , Prologis’s upward near term trend in share price snapped and reversed . (wink)

    Stay tuned !

    In my humble opinion ………….

  3. UPDATE !

    We have FOLLOW THROUGH ! PLD is down BIG ! 3.29% !!!

    Now that’s what I’m talking about , LOL ! Now how’s that for “nothing to indicate a near term reversal ” ??? LOL !

    BOOYAH !

    In my humble opinion ………….

  4. Ok LOL !

    Here’s today’s news AFTER the fact , of which I called BEFORE the fact . THEN it became “news” ………

    Quote:
    ProLogis Inc. (PLD) Dips 5.47% for October 28

    “Monday, 28 October 2019 17:05 (EST)
    Among the S&P 500’s biggest fallers on Monday October 28 was ProLogis Inc. (PLD). The stock experienced a 5.47% decline to $85.89 with 15.44 million shares changing hands.
    ProLogis Inc. started at an opening price of 87.72 and hit a high of $88.44 and a low of $85.81. Ultimately, the stock took a hit , yaddi yaddi yadda !

    Next : Baystreet
    Monday, October 28, 2019
    “Prologis Stock Price Slides on Eyes for Liberty

    Prologis Inc (NYSE:PLD) found its shares moving sharply downward Monday, having announced plans to acquire Liberty Property Trust (NYSE:LPT)
    The San Francisco-based Prologis and Wayne, Pa.-based Liberty have entered into a definitive merger agreement by which Prologis will acquire Liberty in an all-stock transaction, valued at approximately $12.6 billion, including the assumption of debt.
    The board of directors of Prologis and the board of trustees of Liberty have each unanimously approved the transaction.
    “Liberty’s logistics assets are highly complementary to our U.S. portfolio and this acquisition increases our holdings and growth potential in several key markets,” said Prologis chairman and CEO Hamid R. Moghadam.

    “The strategic fit between the portfolios allows us to capture immediate cost and long-term revenue synergies.”
    The transaction deepens Prologis’ presence in target markets such as Lehigh Valley, Chicago, Houston, Central Pa, New Jersey and Southern California.
    The acquisition on an owned and managed basis comprises: 107 million square foot logistics operating portfolio; 87% overlap with key markets, along with 5.1 million square feet of logistics development in progress
    It also comprises 1,684 acres of land for future logistics development with build-out potential of 19.7 million square feet, and 4.9 million square feet of office operating and development portfolio
    Prologis plans to dispose of approximately $3.5 billion of assets on a pro rata share basis. This includes $2.8 billion of non-strategic logistics properties and $700 million of office properties.
    Prologis sank $3.01, or 3.3%, to $87.90, ”

    Ok WHATEVER !

    The point is : “Executives on the call said there is nothing to indicate a near-term reversal in any of the trends affecting their markets. ”

    And I begged to differ , LOL !

    I also posted this piece this morning on the latest Prologis article posted by freightwaves titled :

    Prologis to acquire Liberty Property Trust

    Noble1
    says:
    10/28/2019 at 5:36 am
    Quote:
    “New warehouse and distribution space in Q3 2019 exceeded demand for the first time in nine years, and the excess supply will slow the pace of growth in rents and absorption of new space into 2020, according to Cushman & Wakefield. “

    What is the point of all this ?

    The point is while management is reporting the sun is shinning while they’re is la la land behind the eight ball , we can be ” ahead of the curve ” .

    Who is “we” ? YOU , ME, US , The “Truck Driver Alliance Co-Op” to be !!! Go take a look at how much that move paid off using leverage(derivatives) .

    While truck drivers are being used , abused , and paid peanuts by major carriers that are breaking your b*lls with regulations lobbied galore coming out of your wazoo to the point of making you want to quit , you could be taking a stand to create a prosperous change for yourselves by structuring yourselves wisely as a UNITED GROUP !

    I’ve written about this many times . And quite frankly I’m getting fed up of talking to the wall ! As I’ve said many times before , you have the potential to become a force to be reckoned with if you UNITE and act wisely through the creation of a plan along with a strategy to achieve that goal . NOBODY will care about YOU more than yourselves will .

    I don’t care what nationality you are , what gender you are , nor about your religion , color of your skin , and age !

    What I care about is freeing truck drivers from the corrupt and unjust system that keeps making a lot of money off of your backs without giving you your fair share and treating you with dignity . You need to come together and stop competing with yourselves and start competing with those taking advantage of your lack of savoir fair and division ! Eliminate the middlemen ! Become the “Carrier ” , Become the Freight Broker” BECOME THE BANK ! etc .

    Most of you said you wanted a REVOLUTION(change) ! Well , I’m offering you one ! A civilized shrewd one ! Not a strike causing a public disturbance for a few pennies until the next time . A sustainable change where the sky is the limit is what I’m interested in creating with you , for you , and for us ! Not causing a storm and putting the power in someone else’s hands ! But a realistic plan which will put power in our hands !

    Be the Satoshi Karamoto’s in the trucking industry ! Be pioneers and develop your “BITCOIN”(different way of doing things).

    The only reason the trucking industry has succeeded in becoming the can of worms it has become today is because you TRUCK DRIVERS have allowed it ! Take responsibility and create a change ! There is hope , never lose hope and disrupt this freaking trucking industry of a joke which is controlled by clowns ! But do it ethically and shrewdly to the bone man ! That’s what will set us apart from “them” .

    And by the way , GREED is Good(Gordon Gekko/Wall Street) ! LOL !

    In my humble opinion …………
    .

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