CubeSmart (CUBE) Reports In-Line Q1 EPS, Revenues Miss; Raises FY19 EPS Mid-Point Guidance Above Consensus, Raises FY19 FFO Mid-Point Guidance

CubeSmart (NYSE: CUBE) reported Q1 EPS of $0.19, in-line with the analyst estimate of $0.19. Revenue for the quarter came in at $152.85 million versus the consensus estimate of $153.76 million.

“First quarter results represent a solid start to the year,” commented President and Chief Executive Officer Christopher P. Marr. “We continue to experience broad-based customer demand across our portfolio. With a solid U.S. economy, high employment and low interest rates, consumer confidence remains elevated and creates a positive environment for our product as we enter the prime rental season.”

Key Highlights for the Quarter

• Reported earnings per share (“EPS”) attributable to the Company’s common shareholders of $0.19.
• Reported funds from operations (“FFO”) per share, as adjusted, of $0.40, representing a year-over-year increase of 2.6%.
• Increased same-store (468 stores) net operating income (“NOI”) 2.8% year-over-year, driven by 2.6% revenue growth and a 2.2% increase in property operating expenses.
• Same-store occupancy during the quarter averaged 91.5% and ended the quarter at 92.1%.
• Closed on one property acquisition totaling $22.0 million.
• Sold 0.8 million common shares at an average sales price of $32.20 per share, resulting in net proceeds of $24.6 million.
• Issued $350.0 million of unsecured senior notes in fifth public bond offering.
• Added 46 stores to our third-party management platform during the quarter, bringing our total third-party managed store count to 619.

GUIDANCE:

CubeSmart sees FY2019 EPS of $0.85-$0.89, versus the consensus of $0.80.

2019 Financial Outlook

“With our January issuance of $350 million of senior unsecured notes and subsequent repayment of our $200 million term loan due in 2019, we increased our weighted average debt maturity to 5.8 years,” commented Chief Financial Officer Tim Martin. “We remain disciplined in our strategy to fund the Company’s acquisition and value creation investment pipeline utilizing a balance of cash flow, equity proceeds and unsecured borrowings in a manner consistent with our investment grade ratings.”

The Company is adjusting its previously issued estimates and now expects that its fully diluted FFO per share, as adjusted, for 2019 will be between $1.65 and $1.69 (previously between $1.64 and $1.69), and that its fully diluted earnings per share for the period will be between $0.85 and $0.89 (previously $0.84 and $0.89). Due to uncertainty related to the timing and terms of transactions, the impact of any potential future speculative investment activity is excluded from guidance. For 2019, the same store pool consists of 468 properties totaling 32.4 million square feet.

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

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