Prologis Q4 2024 Earnings Update
Quick recap and notes for Prologis (PLD).
Disclosure: I own shares of PLD.
- 2024 full year core FFO: $5.56
- 2024 full year consensus core FFO: $5.45
- Result: Beat full year and quarterly estimate by $.11.
- 2024 full year core FFO excluding net promote income: $5.53
That’s a solid beat. The substantial majority of the outperformance came from net promote income in the fourth quarter.
- 2024 Q4 core FFO: $1.50
- 2024 Q4 core FFO excluding net promote income: $1.42
- Net promote income added about $.08 per share (rounded)
Net Promote Income
Net promote income (expense) refers to gains (or losses) from PLD’s development business. While development of industrial real estate has become far less profitable, PLD adjusted by looking to develop more data centers instead. That may become a tailwind in future years. Net promote income can be extremely volatile year to year, so we treat it as a bonus. I place a much greater emphasis on the company’s ability to produce Core FFO excluding net promote income. The net promote income produces material value for shareholders. However, Core FFO from real estate operations reflects the performance of the portfolio much better.
Note: This is a unique thing for Prologis.
Prologis Guidance
I edited the guidance slide to add commentary on the right:
- Blue is organizational notes.
- Green is generally good.
- Black is neutral.
- Red is generally negative.
Here’s the slide:
Source: Prologis Quarterly Results (Q4 2024 Supplemental)
Good quarter. Good guidance. Not that remarkable. PLD was substantially undervalued before. Shares are ripping higher today. I didn’t find the report that surprising. Commentary on the earnings call was positive, but it wasn’t a substantial change from prior commentary.
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