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Iron Mountain (IRM) to Post Q2 Earnings: What's in Store?
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Iron Mountain Incorporated (IRM - Free Report) is slated to release second-quarter 2024 results on Aug 1, before the opening bell. The quarterly results are likely to display year-over-year growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this real estate investment trust (REIT) delivered a surprise of 4.8% in terms of adjusted FFO (AFFO) per share. Its results reflected solid performance in the storage and service segments, and the data-center business. However, higher interest expenses in the quarter acted as a dampener.
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 2.64%. The graph below depicts this surprise history:
During the second quarter, Iron Mountain is expected to have benefited from its stable and resilient core storage and records management businesses. 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 healthy demand for traditional services, which comprise charges for related core service activities and a wide array of complementary products and services, is likely to have aided service revenue growth.
Strong demand for connectivity, interconnection and colocation space are 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 $899.2 million, suggesting an 8.2% increase from the year-ago period. The consensus estimate for service revenues is pegged at $605.1 million, indicating a rise of 14.8% from the prior-year quarter.
For the second quarter, IRM projected revenues and adjusted EBITDA of approximately $1.5 billion and $535 million, respectively.
The consensus estimate for quarterly total revenues is pegged at $1.51 billion, suggesting an increase of 10.8% from the prior year quarter’s reported figure.
However, higher interest rates are likely to have been a spoilsport. We estimate second-quarter interest expenses to rise 8.9% on a year-over-year basis.
The company’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly AFFO per share has remained unrevised at $1.06 over the past month. However, the figure implies growth of 12.8% from the year-ago quarter’s reported number.
For the second quarter, IRM expects AFFO per share of $1.05.
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 has an Earnings ESP of 0.00% and currently carries a Zacks Rank of 2. 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 — BXP, Inc. (BXP - Free Report) and Extra Space Storage (EXR - 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 Q2 Earnings: What's in Store?
Iron Mountain Incorporated (IRM - Free Report) is slated to release second-quarter 2024 results on Aug 1, before the opening bell. The quarterly results are likely to display year-over-year growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this real estate investment trust (REIT) delivered a surprise of 4.8% in terms of adjusted FFO (AFFO) per share. Its results reflected solid performance in the storage and service segments, and the data-center business. However, higher interest expenses in the quarter acted as a dampener.
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 2.64%. 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
During the second quarter, Iron Mountain is expected to have benefited from its stable and resilient core storage and records management businesses. 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 healthy demand for traditional services, which comprise charges for related core service activities and a wide array of complementary products and services, is likely to have aided service revenue growth.
Strong demand for connectivity, interconnection and colocation space are 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 $899.2 million, suggesting an 8.2% increase from the year-ago period. The consensus estimate for service revenues is pegged at $605.1 million, indicating a rise of 14.8% from the prior-year quarter.
For the second quarter, IRM projected revenues and adjusted EBITDA of approximately $1.5 billion and $535 million, respectively.
The consensus estimate for quarterly total revenues is pegged at $1.51 billion, suggesting an increase of 10.8% from the prior year quarter’s reported figure.
However, higher interest rates are likely to have been a spoilsport. We estimate second-quarter interest expenses to rise 8.9% on a year-over-year basis.
The company’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly AFFO per share has remained unrevised at $1.06 over the past month. However, the figure implies growth of 12.8% from the year-ago quarter’s reported number.
For the second quarter, IRM expects AFFO per share of $1.05.
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 has an Earnings ESP of 0.00% and currently carries a Zacks Rank of 2. 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 — BXP, Inc. (BXP - Free Report) and Extra Space Storage (EXR - 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.
BXP, scheduled to report quarterly numbers on Jul 30, has an Earnings ESP of +0.62% and presently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Extra Space Storage is slated to report quarterly numbers on Jul 30. EXR has an Earnings ESP of +1.00% 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.