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What to Expect From Americold (COLD) This Earnings Season?

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Americold Realty Trust (COLD - Free Report) is slated to report third-quarter 2019 results on Nov 7, after the market closes. The company’s quarterly performance is likely to reflect growth in revenues as well as funds from operations (FFO) per share.

In the last reported quarter, this industrial REIT, which is engaged in the ownership and operation of temperature-controlled warehouses, delivered a positive surprise of 10.7% with respect to funds from operations (FFO) per share. Results reflect better-than-expected growth in revenues. Over the trailing three quarters, the company surpassed estimates on two occasions for as many misses, the average beat being 5.45%. The graph below depicts the surprise history of the company:

Americold Realty Trust Price and EPS Surprise
 

Americold Realty Trust Price and EPS Surprise

Americold Realty Trust price-eps-surprise | Americold Realty Trust Quote

Americold’s strategically-located high-quality facilities serve as an indispensable component of food infrastructure from “farm to fork", connecting food producers, processors, distributors and retailers to consumers. The company is likely to have experienced decent demand for these properties in the to-be-reported quarter. Particularly, steady population growth and consumption increase, together with transition in consumer preferences toward healthy, perishable food are likely to have resulted in healthy demand for temperature-controlled infrastructure.

Also, the company is anticipated to have enjoyed significant competitive advantage with its infrastructure, aided by superior IT and operating platforms. It is focused on improvement initiatives and continues to boost productivity, with the trend likely to have continued in the quarter under review as well.

The company is also expected to have benefited from labor productivity and efforts to grow its fixed commitment storage contracts in the period under consideration. Moreover, retail customers are navigating through the evolving competitive landscape by improving and integrating their e-commerce offerings. This e-commerce boom is creating opportunities for Americold.

Focus on external growth opportunities is also conducive to the company’s long-term growth. During the second quarter, the company completed the acquisition of Cloverleaf Cold Storage, comprising 22 facilities and including 132 million cubic feet, as well as Lanier Cold Storage, adding two facilities and 14 million cubic feet to its portfolio. These acquisitions have added size, scale, density and diversification of product and customer. Such expansion efforts are also anticipated to have helped maintain the company’s growth momentum during the September-end quarter.

Amid these, the Zacks Consensus Estimate for third-quarter revenues is currently pinned at $472.4 million, indicating 17.5% increase year over year.

However, the company’s activities during the quarter were inadequate to win analysts’ confidence. Consequently, the Zacks Consensus Estimate for FFO per share remained unchanged at 32 cents, over the past seven days. Nevertheless, it indicates 14.3% growth, year over year.

Here is what our quantitative model predicts:

Our proven model does not conclusively predict a positive surprise in terms of FFO per share for Americold this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Americold carries a Zacks Rank of 3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks That Warrant a Look

Here are a few stocks in the broader real sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:

Paramount Group, Inc. (PGRE - Free Report) , scheduled to release earnings on Nov 6, has an Earnings ESP of +1.41% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Realogy Holdings Corp. , slated to report third-quarter results on Nov 7, has an Earnings ESP of +2.41% and sports a Zacks Rank of 1.

Senior Housing Properties Trust , set to release quarterly numbers on Nov 7, has an Earnings ESP of +3.23% and carries a Zacks Rank of 2, currently.

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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