Prologis cuts 2026 net earnings guidance as Core FFO rises to $1.60 per share

Prologis, Inc. (PLD) said in a regulatory filing Thursday that net earnings attributable to common stockholders rose to $816 million, or $0.86 per diluted share, in the third quarter, from $763 million, or $0.82 per share, a year earlier.

The results were released in a press release and supplemental information that the company furnished with the filing. The same filing updated 2026 guidance, lowering the net earnings outlook and changing the Core FFO range.

Here's how the company did:

• Net earnings per diluted share: $0.86 vs. $0.82 a year earlier
• Core FFO per diluted share: $1.60 vs. $1.49 a year earlier
• Core FFO excluding Net Promote Income (Expense), per diluted share: $1.61 vs. $1.50 a year earlier
• Total revenues: $2,388 million vs. $2,214 million a year earlier
• Net earnings attributable to common stockholders: $816 million vs. $763 million a year earlier
• Adjusted EBITDA attributable to common stockholders/unitholders: $2,081 million vs. $1,868 million a year earlier

Core FFO, or funds from operations adjusted for items the company excludes, is a non-GAAP measure. Net promote income is promote revenue earned from third-party investors, net of related expenses.

Rental revenue was $2,205 million, compared with $2,054 million a year earlier. Strategic capital revenue was $164 million, up from $150 million.

Depreciation and amortization rose to $710 million from $648 million, and interest expense rose to $287 million from $258 million. General and administrative expenses were $128 million, compared with $111 million.

Gains on dispositions of development properties and land, net, were $51.5 million, compared with $15.4 million a year earlier. Gains on other dispositions of investments in real estate, net, were $56.4 million, up from $32.2 million.

Here's how the company's business lines did during the quarter:

• Real estate: $1.54 per diluted share vs. $1.43 a year earlier
• Strategic capital: $0.06 per diluted share vs. $0.06 a year earlier
• Realized development gains, net of taxes: $0.08 per diluted share vs. $0.01 a year earlier

For the first nine months, net earnings per diluted share were $3.04, compared with $2.06. Total revenues were $7,111 million, up from $6,537 million, and Core FFO per diluted share was $4.73, compared with $4.37.

"We executed well on our plan this quarter, signing 60 million square feet of leases and announcing nearly $2.3 billion of transactions," CEO Daniel S. Letter said.

Letter added: "Customers are running lean on inventory, and excess capacity within their networks has largely cleared." He also said: "We see healthy demand supported by e-commerce, advanced manufacturing and the build-out of the data center supply chain."

Leasing and occupancy

On an owned and managed basis, average occupancy was 95.1% and period-end occupancy was 95.6%. Leases commenced totaled 55.9 million square feet across the operating and development portfolios, and retention was 75.9%.

On a Prologis Share basis, cash same store NOI grew 5.9%. Net effective rent change was 38.0%, and cash rent change was 23.4%.

Capital deployment and balance sheet

On a Prologis Share basis, the company acquired $702 million of properties at a weighted average stabilized cap rate of 4.2%, excluding other real estate. Development starts were $964 million, with an estimated weighted average yield of 6.6%.

Development stabilizations totaled $401 million, with an estimated weighted average yield of 5.6% and estimated value creation of $39 million. Total dispositions and contributions were $169 million.

The company closed, together with its co-investment ventures, $1.3 billion of debt at a weighted average interest rate of 4.0% and a weighted average term of 4.5 years.

At quarter-end, total available liquidity was approximately $8.8 billion. Debt-to-Adjusted EBITDA was 4.5x, and debt as a percentage of total market capitalization was 23.9%. The weighted average interest rate on the company's share of total debt was 3.3%, with a weighted average term of 7.6 years.

2026 guidance

The company lowered its 2026 net earnings per diluted share guidance to $4.05 to $4.15, from $4.40 to $4.55. The filing does not give a reason for that change.

Core FFO guidance is now $6.25 to $6.29 per diluted share, from $6.22 to $6.30. The earnings guidance includes potential gains from real estate transactions but excludes future foreign currency or derivative gains or losses.

Average occupancy guidance on a Prologis Share basis is 95.25% to 95.50%, from 95.25% to 95.75%. Strategic capital revenue, excluding promote revenue, is $650 million to $660 million, from $660 million to $680 million.

General and administrative expense guidance is $515 million to $525 million, from $510 million to $525 million. Development stabilization guidance is $2,500 million to $3,000 million, from $2,250 million to $2,750 million, inclusive of data centers.

The company said the earnings guidance is also a profit forecast under Rule 28 of the U.K. City Code on Takeovers and Mergers, in connection with its offer for SEGRO plc. The filing does not give the terms of that transaction or an expected closing date.

Letter said: "On SEGRO, shareholder approval was an important milestone in bringing our two companies together. We look forward to completing the transaction and expanding our platform in Europe, increasing the scale at which we can serve customers."

"Our financial results reflect another quarter of strong operating performance and disciplined capital allocation," Chief Financial Officer Timothy D. Arndt said. "That performance, together with the strength of our balance sheet, gives us the capacity and flexibility to continue investing in growth even in a higher interest rate environment."

At September 30, the company owned or had investments in properties and development projects expected to total approximately 1.3 billion square feet in 20 countries, the supplemental information said.