Key Takeaways

• Prologis exceeded analysts' estimates for third-quarter profit and revenue as the real estate market began to recover from its slump.

• Core funds from operations (FFO) climbed 10%, more than expected, driving the gains.

• Prologis boosted the low end of its full-year guidance for earnings and core FFO.

Shares of Prologis (PLD) advanced Wednesday when the largest industrial real estate firm posted better-than-anticipated results and solid guidance on strong funds from operations (FFO).

The real estate investment trust (REIT) reported third-quarter earnings per share (EPS) of $1.08, with revenue rising 6.3% year-over-year to $2.04 billion. Both exceeded consensus forecasts of analysts polled by Visible Alpha. Core FFO advanced 10% to $1.43, also beating estimates.

Leases commenced climbed to 50.8 million square feet from 46.4 million square feet a year ago. Average occupancy of its owned and managed properties of 95.9% and retention of 75.7% were down.

CEO Says Real Estate Market 'Bottoming Process' Is Under Way

Co-Founder and Chief Executive Officer (CEO) Hamid Moghadam said that the "bottoming process" in the real estate market is under way as its customers "navigate an uncertain environment." Moghadam added that "the supply picture is improving, and the long-term demand drivers for our business remain strong."

Prologis expects full-year earnings of $3.35 to $3.45 versus its earlier outlook of $3.25 to $3.45. It sees core FFO in the range of $5.42 to 5.46 compared with the previous $5.39 to $5.47.

Prologis shares rose 2% an hour after the opening bell Wednesday but are down 7% year-to-date.

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