CubeSmart (CUBE) Tops Q2 EPS by 1c, Beats on Revenues; FY17 EPS Guidance Above Consensus

CubeSmart (NYSE: CUBE) reported Q2 EPS of $0.18, $0.01 better than the analyst estimate of $0.17. Revenue for the quarter came in at $138.56 million versus the consensus estimate of $137.65 million.

GUIDANCE:

CubeSmart sees FY2017 EPS of $0.70-$0.74, versus the consensus of $0.67.

CubeSmart sees Q3 2017 EPS of $0.19-$0.20, versus the consensus of $0.19.

2017 Financial Outlook

The Company is adjusting its previously issued estimates and maintaining its underlying assumptions for 2017 guidance. Fully diluted FFO per share, as adjusted, for 2017 is now expected to be between $1.53 and $1.57 (previously between $1.52 and $1.57). The Company’s estimates are based on the following key operating assumptions:

For 2017, a same-store pool consisting of 432 properties totaling 29.5 million square feet
Same-store net operating income (“NOI”) growth of 4.0% to 5.0% over 2016, driven by revenue growth of 3.75% to 4.75% and expense growth of 4.0% to 5.0%
General and administrative expenses of approximately $35.0 million to $36.0 million

Key investment and financing assumptions include:

Impact of development activity:

Four new stores opened in 2015 for a total investment of $65.1 million.
Five new stores opened in 2016 for a total investment of $133.4 million.
Two new wholly-owned development properties and two new joint venture development properties are expected to open in 2017 for a total investment of $159.7 million. As of June 30, 2017, one wholly-owned property has opened for $9.7 million and one joint venture development property partially opened during the quarter and is expected to be completed in the third quarter for $74.3 million.
Three new stores are expected to be acquired at C/O in 2017 for a total investment of $40.3 million, of which one property has been acquired for $11.2 million.
Approximately $0.06 to $0.07 per share of dilution in 2017 related to development activity.

Impact of financing activity:

Funding 2017 debt maturities and our acquisition and development commitments with long-term capital, with specific impact to 2017 earnings dependent upon the amount, timing, cost and form of capital we raise.

Due to uncertainty related to the timing and terms of transactions, the impact of any potential future speculative investment activity not contemplated above, is excluded from guidance. For 2017, the Company is targeting $25 million to $75 million of acquisitions, excluding contracts related to joint venture development or purchase at completion of construction and issuance of C/O investments discussed above, and $0 to $50 million of dispositions.

2017 Full Year Guidance Range or Value 0.70 to $
Plus: real estate depreciation and amortization 0.83 1.53 to $


Earnings per diluted share allocated to common shareholders $ 0.20 0.21
FFO per diluted share, as adjusted $ 0.41

For earnings history and earnings-related data on CubeSmart (CUBE) click here.

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