11:10 AM EDT, 07/17/2024 (MT Newswires) -- Prologis ( PLD ) exceeded estimates for second-quarter core funds from operations on Wednesday while it raised the middle point of its full-year core FFO guidance.

The logistics real estate investment trust reported core FFO of $1.34 for the three months ended June 30, down from $1.83 a year ago but topping the average analyst estimate on Capital IQ by a penny. Shares of Prologis ( PLD ) were up 6% in Wednesday trade.

Rental revenue advanced to $1.85 billion from $1.65 billion year over year but missed the $1.86 billion market view. Total revenue dipped to $2.01 billion from $2.45 billion due to lower strategic capital revenues.

"While customer demand remains subdued, it is improving, and we expect that trend to continue as the construction pipeline shrinks," Chief Executive Hamid Moghadam said in a statement.

Average occupancy was 96.1% during the quarter, down from 97.5% in the same period of 2023 and from 96.8% in the first quarter. The REIT's second-quarter rent change dropped to 73.9% from 78.5% a year ago on a net effective basis but edged up to 51.4% from 48.1% on a cash basis. Cash same-store net operating income was 7.2%, down from 10.7% a year ago.

Prologis ( PLD ) tweaked its 2024 core FFO guidance to a range of $5.39 to $5.47, lifting the lower-end of the prior outlook from $5.37 and bringing up the range's midpoint 0.2%. Wall Street was modeling for core FFO of $5.42 in the ongoing year. Its strategic capital revenue excluding promote was reduced by 1.9% at the midpoint.

"The company is capitalizing on a wide range of growth opportunities, including our data center and energy businesses," Chief Financial Officer Timothy Arndt said.

In a note reiterating a buy rating and $125 price target on the stock, Truist Securities called Prologis's ( PLD ) core operations "relatively positive" amid broad industry challenges. The brokerage predicted that supply and demand balance would achieve "more favorable equilibrium in late 2025."

Price: 128.60, Change: +7.11, Percent Change: +5.85