Published on 1 May 2024 on Zacks via Yahoo Finance

Extra Space Storage (EXR) Q1 FFO Tops Estimates, Occupancy Rises

Extra Space Storage Inc. EXR reported first-quarter 2024 core funds from operations (FFO) per share of $1.96, which beat the Zacks Consensus Estimate by a penny. However, the figure declined 3% from the prior-year quarter.The results reflect a rise in occupancy and better-than-anticipated revenues. However, higher same-store operating expenses and increased interest expenses during the quarter were a spoilsport.Quarterly revenues of $799.5 million beat the Zacks Consensus Estimate of $786.5 million. The top line jumped 58.9% year over year, reflecting acquisition.Per Joe Margolis, CEO of Extra Space Storage, "We achieved positive year-over-year occupancy growth in the Extra Space and Life Storage same-store pools.  We have also continued to realize G&A savings and to expand our bridge lending and third party management programs.  Rental activity has been strong year to date and vacates remain muted, which positions us well to maximize revenue during the 2024 leasing season."

Quarter in Detail

Same-store revenues increased 1.0 % year over year to $414.7 million in the first quarter. Same-store operating expenses rose 5.5% year over year to $107.8 million, reflecting an increase in marketing, insurance, payroll and benefits, repairs and maintenance, property taxes and office expenses.Consequently, same-store net operating income (NOI) decreased 0.5% year over year to $306.8 million.The same-store square-foot occupancy expanded 50 basis points year over year to 93.2% as of Mar 31, 2024. Our estimate was pegged at 92.6%.In the first quarter, interest expenses flared up to $132.9 million from $80.1 million a year ago. Our estimate was $126.4 million.