Self-storage real estate investment trust Sovran Self Storage, Inc. (SSS) on Wednesday reported a 14.7% year-over-year decline in profit for the first quarter, hurt by higher interest expense as well as increased customer move-in incentives. However, funds from operations or FFO declined only 7%, while FFO per share topped analysts' expectations by a penny. The company also provided FFO per share guidance for the second quarter and backed its FFO per share forecast for fiscal 2009.
In a statement, president and chief operating officer, Kenneth Myszka said, "The overall economic climate has had an impact on our operating performance, but our scale and management systems put us in good stead to weather this downturn."
The Williamsville, New York-based company reported net income of $7.64 million or $0.35 per share for the first quarter, 14.7% lower than $8.95 million or $0.41 per share in the year-ago quarter.
FFO for the quarter declined a tad to $16.22 million or $0.74 per share from $17.45 million or $0.81 per share in the prior-year quarter. On average, five analysts polled by Thomson Reuters expected the company to earn $0.73 per share for the quarter. Analysts' estimates typically exclude special items.
The company noted that lower earnings were attributable to higher interest expense associated with its long-term financing and increased customer move-in incentives.
Total operating revenues decreased a tad to $49.55 million from $49.62 million in the same quarter last year. Three Wall Street analysts had a consensus revenue estimate of $48.75 million for the first quarter.
Rental income for the first quarter was $47.66 million, lower than $48.06 million in the corresponding quarter of last year.
Income from operations for the first quarter declined to $18.04 million from $18.36 million in the prior-year quarter. Total operating expenses was $31.51 million, up from $31.26 million in the year-ago quarter. Interest income for the quarter increased to $9.98 million from $8.96 million in the same quarter last year.
Looking ahead to the second quarter, the company expects FFO in a range of $0.73 to $0.75 per share. Analysts expect the company to report earnings of $0.75 per share for the second quarter.
For fiscal 2009, Sovran Self Storage backed its prior FFO forecast in the range of $3.00 to $3.08 per share. The Street is looking for full-year 2009 earnings of $2.98 per share.
The company also revealed its intention to slash regular quarterly dividend by about 30% to $0.45 per share from $0.64, beginning with the quarterly dividend for the second quarter of fiscal 2009.
SSS closed Wednesday's regular trading session at $21.83, up $0.23 or 1.06% on a volume of 0.49 million shares, higher than the three-month average volume of 0.29 million shares.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.