A “great summer” that featured stronger occupancy rates and fewer discounts to attract new customers helped Sovran Self Storage to more than double its third-quarter profits, the Amherst-based company said Thursday.
Sovran, which runs 443 self-storage facilities in 25 states under the Uncle Bob’s brand name, said its earnings jumped to $25.1 million, or 85 cents per share, which was more than double the $11.4 million, or 41 cents per share, that it earned a year ago, when its profits were hurt by acquisition costs and debt-refinancing expenses.
Excluding those costs from last year and $1 million in acquisition-related expenses from the summer, Sovran’s adjusted earnings strengthened by 31 percent and easily topped analyst forecasts.
The company’s adjusted earnings of $26.1 million, or 88 cents per share, were higher than the $19.9 million, or 72 cents per share, that it earned last year when the acquisition and debt-related expenses are excluded. Analysts had expected the company to earn 82 cents per share.
“We enjoyed a great summer season,” said David Rogers, Sovran’s chief executive officer, in a statement.
Stronger occupancy levels helped Sovran’s revenues from the 334 Uncle Bob’s stores that have been open for at least a year to rise by 8 percent, while expenses fell by 1 percent. Almost 11 percent more customers moved into Sovran’s stores during the summer quarter than during the third quarter of 2011, and just 2.3 percent more moved out, the company said.
That led to a big increase in occupancy levels, which jumped to 88.2 percent at stores open at least a year from 81.5 percent during the summer of 2011. That gain was partially offset by a 1 percent drop in average rent, which dipped to $10.61 per square foot from $10.76 per square foot a year ago.
Sovran also said that all but two of its 68 stores that were in the path of Hurricane Sandy are open, although 16 still were without power as of Thursday morning. One store reported “widespread issues” because of the storm, while damage reports from the others involved only minor damage, the company said.
“Most of them have debris damage,” Rogers said during a conference call. “Dollarwise, it should not be much more than negligible.”
The company acquired 10 stores in existing markets during the quarter for $63.2 million, adding 836,000 in net rentable square feet of space. Five of the stores are around Atlanta, while three are in the Jacksonville, Fla., market and one apiece in Chicago and Raleigh, N.C.
At the same time, the company sold 17 stores for $47.7 million, including nine stores in Houston, three in Dallas, four in Michigan and one in Maryland.
Sovran also is “pretty far along” in negotiations to purchase eight additional stores in existing markets for around $64 million, Rogers said.
Sovran said it expects to earn between 80 cents and 82 cents per share during the current quarter, which is in line with the 81 cents that analysts are expecting. For the year, Sovran said it expects to earn $3.25 to $3.27 per share, which is better than the $3.15 analysts are forecasting.