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Iron Mountain (IRM) to Post Q4 Earnings: What's in Store?
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Iron Mountain Incorporated (IRM - Free Report) is slated to release fourth-quarter and full-year 2023 earnings results on Feb 22 before the opening bell. The quarterly results are likely to display year-over-year revenue growth and funds from operations (FFO) per share.
In the last reported quarter, this real estate investment trust (REIT) delivered a negative surprise of 1.00% in terms of adjusted FFO (AFFO) per share. The revenue number came in lower than expected for the quarter.
Over the trailing four quarters, Iron Mountain’s FFO per share surpassed the Zacks Consensus Estimate on three occasions and missed in the remaining period, the average beat being 2.16%. The graph below depicts this surprise history:
Iron Mountain is expected to have benefited from its stable and resilient core storage and records management businesses during the fourth quarter. Storage rental revenue growth, which accounts for the lion’s share of IRM’s revenues, is likely to have been supported by healthy revenue management and volume trends.
The company’s new and existing digital offerings and healthy demand for traditional services, which comprise charges for related core service activities and a wide array of complementary products and services, are likely to have aided service revenue growth.
Solid demand for connectivity, interconnection and colocation space is likely to have driven healthy data center leasing activity in the quarter, boosting the company’s Global Data Center business quarterly performance.
Further, Iron Mountain’s diversified tenant and revenue base across different industries is expected to have led to stable revenues during the quarter.
The Zacks Consensus Estimate for storage rental revenues is pegged at $884.43 million, suggesting a 14.9% increase from the year-ago period. The consensus estimate for service revenues is pegged at $565.08 million, indicating a rise of 10.9% from the prior-year quarter.
For the fourth quarter, IRM projected revenues and adjusted EBITDA to be $1.44 billion and $520 million, respectively.
The consensus estimate for quarterly total revenues is pegged at $1.44 billion, suggesting an increase of 12.69% from the prior quarter’s reported figure.
Nonetheless, higher interest expenses are likely to have been a spoilsport. We estimate fourth-quarter interest expenses to rise 15.9% on a year-over-year basis and full-year interest expenses to surge 21.4% from the prior year.
For the fourth quarter, IRM expects AFFO per share of $1.05.
The company’s activities during the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly AFFO per share has been revised a cent south to $1.05 over the past month. However, the figure implies growth of 7.14% from the year-ago quarter’s reported number.
For 2023, Iron Mountain projected AFFO per share in the range of $3.91-$4.00. This is based on projections for revenues in the range of $5,500 -$5,600 million and adjusted EBITDA in the band of $1,940-$1,975 million.
For the full year, the Zacks Consensus Estimate for AFFO per share is pegged at $3.95. The figure indicates a 3.95% increase year over year on 7.80% year-over-year growth in revenues to $5.50 billion.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for Iron Mountain this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Iron Mountain currently carries a Zacks Rank of 3 and has an Earnings ESP of -0.48%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT sector — Extra Space Storage Inc. (EXR - Free Report) and American Homes 4 Rent (AMH - Free Report) — you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Iron Mountain (IRM) to Post Q4 Earnings: What's in Store?
Iron Mountain Incorporated (IRM - Free Report) is slated to release fourth-quarter and full-year 2023 earnings results on Feb 22 before the opening bell. The quarterly results are likely to display year-over-year revenue growth and funds from operations (FFO) per share.
In the last reported quarter, this real estate investment trust (REIT) delivered a negative surprise of 1.00% in terms of adjusted FFO (AFFO) per share. The revenue number came in lower than expected for the quarter.
Over the trailing four quarters, Iron Mountain’s FFO per share surpassed the Zacks Consensus Estimate on three occasions and missed in the remaining period, the average beat being 2.16%. The graph below depicts this surprise history:
Iron Mountain Incorporated Price and EPS Surprise
Iron Mountain Incorporated price-eps-surprise | Iron Mountain Incorporated Quote
Factors to Note
Iron Mountain is expected to have benefited from its stable and resilient core storage and records management businesses during the fourth quarter. Storage rental revenue growth, which accounts for the lion’s share of IRM’s revenues, is likely to have been supported by healthy revenue management and volume trends.
The company’s new and existing digital offerings and healthy demand for traditional services, which comprise charges for related core service activities and a wide array of complementary products and services, are likely to have aided service revenue growth.
Solid demand for connectivity, interconnection and colocation space is likely to have driven healthy data center leasing activity in the quarter, boosting the company’s Global Data Center business quarterly performance.
Further, Iron Mountain’s diversified tenant and revenue base across different industries is expected to have led to stable revenues during the quarter.
The Zacks Consensus Estimate for storage rental revenues is pegged at $884.43 million, suggesting a 14.9% increase from the year-ago period. The consensus estimate for service revenues is pegged at $565.08 million, indicating a rise of 10.9% from the prior-year quarter.
For the fourth quarter, IRM projected revenues and adjusted EBITDA to be $1.44 billion and $520 million, respectively.
The consensus estimate for quarterly total revenues is pegged at $1.44 billion, suggesting an increase of 12.69% from the prior quarter’s reported figure.
Nonetheless, higher interest expenses are likely to have been a spoilsport. We estimate fourth-quarter interest expenses to rise 15.9% on a year-over-year basis and full-year interest expenses to surge 21.4% from the prior year.
For the fourth quarter, IRM expects AFFO per share of $1.05.
The company’s activities during the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly AFFO per share has been revised a cent south to $1.05 over the past month. However, the figure implies growth of 7.14% from the year-ago quarter’s reported number.
For 2023, Iron Mountain projected AFFO per share in the range of $3.91-$4.00. This is based on projections for revenues in the range of $5,500 -$5,600 million and adjusted EBITDA in the band of $1,940-$1,975 million.
For the full year, the Zacks Consensus Estimate for AFFO per share is pegged at $3.95. The figure indicates a 3.95% increase year over year on 7.80% year-over-year growth in revenues to $5.50 billion.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for Iron Mountain this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.
Iron Mountain currently carries a Zacks Rank of 3 and has an Earnings ESP of -0.48%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are two stocks from the broader REIT sector — Extra Space Storage Inc. (EXR - Free Report) and American Homes 4 Rent (AMH - Free Report) — you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
Extra Space Storage, scheduled to report quarterly numbers on Feb 27, has an Earnings ESP of +0.70% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Homes 4 Rent, slated to release quarterly numbers on Feb 22, has an Earnings ESP of +1.68% and carries a Zacks Rank of 3 at present.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.