In This Article:
Extra Space Storage EXR, a leading self-storage real estate investment trust (REIT) in the United States, is set to release its fourth-quarter and full-year 2024 results on Feb. 25, after market close. As the market anticipates the earnings announcement, this article provides an in-depth preview of EXR’s expected performance in the fourth quarter, considering overall industry trends, the company’s growth strategy and acquisitions.
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In the last reported quarter, this Salt Lake City, UT-based REIT delivered a surprise of 1.97% in terms of core FFO per share. The results reflected a rise in occupancy and better-than-anticipated revenues.
Over the trailing four quarters, the company beat the Zacks Consensus Estimate on three occasions and missed in the remaining period, the average surprise being 1.25%. The graph below depicts this surprise history:
Extra Space Storage Inc Price and EPS Surprise
Extra Space Storage Inc price-eps-surprise | Extra Space Storage Inc Quote
Factors to Consider Ahead of EXR’s Results
In the fourth quarter, Extra Space Storage is likely to have continued benefiting from its strong presence in key cities and efforts to expand through accretive acquisitions, mutually beneficial joint venture partnerships and third-party management services.
EXR's continued emphasis on enhancing the customer experience through technology integration and operational improvements is likely to have bolstered its competitive edge. Its strong brand reputation and technological advancements are expected to have supported performance during the quarter. This REIT is likely to have sustained a healthy balance sheet throughout the period.
However, the company continues to see new customer price sensitivity and is likely to face headwinds from lower new customer rates in the near term. As such, the reacceleration in revenue growth is expected to be challenging until the company regains pricing power with new customers.
Further, high interest expenses are expected to have cast a pall on the company’s performance to some extent.
Q4 Projections for EXR
The Zacks Consensus Estimate of $702 million for quarterly property rental revenues suggests an increase from the year-ago period’s $697 million. The consensus estimate for revenues from tenant insurance of $83.5 million implies an increase from $70.4 million in the year-ago period.
The Zacks Consensus Estimate of $831.5 million for quarterly revenues suggests a 4.2% increase year over year.
However, the consensus mark for management and franchise fees for the quarter are projected at $30.1 million, down from $30.4 in the year-ago period.