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Prologis posts higher 2nd-quarter FFO

SAN FRANCISCO (AP) -- Prologis Inc. said Wednesday that a key measure of profitability improved in the second quarter from a year earlier as the industrial real estate developer's expenses declined, helping to offset a sharp drop in revenue.

The real estate investment trust reported that funds from operations, or FFO, rose to $202.2 million, or 41 cents per share, in the three months ended June 30. That compares with FFO of $172.7 million, or 37 cents per share, in the prior-year quarter.

FFO adds back real estate depreciation and amortization, write-downs, gains on currency and derivatives, and merger-related costs, and is considered a key gauge of financial performance in the real estate industry.

Core FFO, which further strips out impairment charges, merger costs and other items, totaled $203.3 million, or 41 cents per share.

Analysts, who usually exclude items, had expected, on average, FFO of 37 cents per share, according to FactSet.

The company reported smaller a net loss for the quarter of $1.5 million, or break-even on a per-share basis. That compares with a loss of $8.1 million, or 2 cents per share, a year earlier.

Analysts had expected earnings of 2 cents per share.

Prologis' revenue fell 16 percent to $419.5 million from $501.2 million last year. The decline was due to a sharp drop in rental income. Even so, the company's revenue beat the $392.6 million Wall Street had forecast, on average.

For the full year, Prologis said it expects core FFO per share to range from $1.63 and $1.67, and earnings per share from 58 cents to 62 cents. Wall Street had projected FFO of $1.63 per share and earnings of 67 cents per share for the year.

Prologis' shares slipped 13 cents to $40.14 in midday trading. The stock is up about 10 percent since the start of the year.