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What's in the Offing for Iron Mountain (IRM) Q1 Earnings?

Zacks Equity Research

Iron Mountain Inc. IRM is set to release first-quarter 2019 results on Apr 25, before the market opens. The company’s results will likely reflect year-over-year growth in revenues and funds from operations (FFO) per share.

In the last reported quarter, this real estate investment trust’s (REIT) normalized FFO of 56 cents per share surpassed the Zacks Consensus Estimate of 52 cents. Results reflect decent organic growth in storage and services revenues.

Over the preceding four quarters, the company surpassed the FFO per share estimates in three occasions and missed in the other, resulting in average positive surprise of 3.30%. This is depicted in the graph below:

Iron Mountain Incorporated Price and EPS Surprise

Iron Mountain Incorporated Price and EPS Surprise | Iron Mountain Incorporated Quote

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Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Continuing its inorganic growth strategy, Iron Mountain added eight facilities to the company’s portfolio through the acquisition of Lane Archive Technologies Limited in Philippines. The facilities located in Manila, Davao and Cebu have strengthened the company’s existing portfolio in the country, and enabled it to provide records and data management and destruction services to around 1,000 customers. In fact, the Zacks Consensus Estimate for first-quarter revenues from adjusted storage rental activities is pegged at $669 million, indicating year-over-year (y/y) growth of 1.8%.

Moreover, adjusted service revenues are pegged at $398 million and reflects y/y rise of 3.3%.

We expect movement in paper prices to emerge as a headwind for Iron Mountain in first-quarter 2019.  Further, the company is expected to be affected by prevailing tapering storage trends and witness lower volumes in its developed markets.

Amid these, the Zacks Consensus Estimate for quarterly storage rental revenues from the North American data-management segment is expected to decline 3% y/y to $67 million. Furthermore, total revenues from its data-management operations in North America are estimated at $97 million and represent a y/y decline of 3%.

Also, the competitive landscape of the storage and information management services industry is anticipated to have resulted in aggressive pricing, impacting Iron Mountain’s margins.

Hence, storage rentals from the company’s North America records and information-management segment might remain flat y/y at $305 million.

Additionally, prior to the first-quarter earnings release, there is lack of any solid catalyst for becoming overtly optimistic about the company’s business activities and prospects. As such, the Zacks Consensus Estimate of FFO per share for the Jan-Mar quarter remained unchanged at 53 cents, over the past 30 days.

Earnings Whispers

Our proven model does not conclusively show that Iron Mountain is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. That is not the case here, as you will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earning ESP: Iron Mounitan’s Earnings ESP is -3.81%.

Zacks Rank: The company currently carries a Zacks Rank of 3 (Hold).

Stocks That Warrant a Look

Alexandria Real Estate Equities, Inc. ARE, scheduled to release earnings on Apr 29, has an Earnings ESP of +0.3% and currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mack-Cali Realty Corporation CLI, slated to release first-quarter results on May 1, has an Earnings ESP of +1.2% and carries a Zacks Rank of 3, at present.

Duke Realty Corporation DRE, set to report quarterly numbers on Apr 25, has an Earnings ESP of +3.94% and carries a Zacks Rank of 3, 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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Iron Mountain Incorporated (IRM) : Free Stock Analysis Report
 
Mack-Cali Realty Corporation (CLI) : Free Stock Analysis Report
 
Duke Realty Corporation (DRE) : Free Stock Analysis Report
 
Alexandria Real Estate Equities, Inc. (ARE) : Free Stock Analysis Report
 
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Zacks Investment Research