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Equinix (EQIX) to Report Q1 Earnings: Will it Disappoint?
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Equinix, Inc. (EQIX - Free Report) will report first-quarter 2020 results on May 6, after market close. The company’s quarterly results are expected to reflect year-over-year growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this global connectivity leader delivered a positive surprise of 2.8% in terms of adjusted FFO per share. The upside primarily stemmed from robust top-line growth, marking the 68th quarter of consecutive revenue growth.
The company has a remarkable streak of beating earnings estimates over the last four quarters. Equinix surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the beat being 3.93%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
In light of the growing demand for colocation and inter-connection services as well as higher demand from cloud users, Equinix has been actively expanding its infrastructure footprint and enhancing capabilities. The company is making efforts to strengthen its data-center footprint on the back of acquisitions and developments.
In January, it wrapped up the $175-million acquisition of three data centers from Axtel S.A.B. de C.V., which cater to Mexico City and Monterrey metro areas of Mexico. The buyout made the company one of the largest network-neutral data-center operators in Mexico. Moreover, in February, the company unveiled its fourth International Business Exchange (IBX) data center in Melbourne, Australia, and completed the acquisition of Packet, a top player in the bare metal automation platform, for a consideration of $335 million in March.
These efforts are expected to have aided the company in increasing its cabinet capacity and cabinet equivalent billing. Notably, the Zacks Consensus Estimate for first-quarter 2020 cabinet capacity is pegged at 302,064, suggesting a rise from 299,500 reported in fourth-quarter 2019. Further, cabinet equivalent billing is expected to increase from 239,000 to 241,984 over the same period.
Further, the company is expected to have continued enjoyed stable revenues in first-quarter 2020, owing to its recurring revenue model. Notably, the Zacks Consensus Estimate for first-quarter recurring revenues from the United States is pegged at $638 million, suggesting 3.7% growth from the prior-year quarter’s reported figure.
These are expected to have contributed to top-line growth during first-quarter 2020. Notably, the Zacks Consensus Estimate for first-quarter 2020 revenues is pinned at $1.45 billion, suggesting a 6.43% improvement year over year. Management projects March-end quarterly revenues at $1.45-$1.46 billion.
However, the company is expected to have incurred integration costs relating to its acquisitions. This is expected to have impacted the company’s earnings in the quarter.
Further, Equinix competes with neutral colocation providers, Internet service providers and Web-hosting facilities. This is expected to have made Equinix vulnerable to pricing pressure. Notably, the company is expected to witness a sequential decline in weighted average price per cabinet (MMR per cabinet) of $1,438 from its European operations.
Lastly, the Zacks Consensus Estimate of FFO per share for the quarter has declined marginally to $5.98 over the past month, reflecting analysts’ bearish sentiments. Also, it suggests year-over-year growth of 0.5%.
Earnings Whispers
Equinix does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Equinix has an Earnings ESP of -2.56%
Zacks Rank: Equinix carries a Zacks Rank of 3, currently.
Here are a few stocks in the REIT 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:
Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI - Free Report) , scheduled to release earnings on May 7, has an Earnings ESP of +5.52% and a Zacks Rank of 3 at present.
SBA Communications Corporation (SBAC - Free Report) , set to report quarterly numbers on May 5, currently has an Earnings ESP of +0.67% and a Zacks Rank of 3.
Americold Realty Trust (COLD - Free Report) , expected to release earnings results on May 7, currently has an Earnings ESP of +9.74% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Equinix (EQIX) to Report Q1 Earnings: Will it Disappoint?
Equinix, Inc. (EQIX - Free Report) will report first-quarter 2020 results on May 6, after market close. The company’s quarterly results are expected to reflect year-over-year growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this global connectivity leader delivered a positive surprise of 2.8% in terms of adjusted FFO per share. The upside primarily stemmed from robust top-line growth, marking the 68th quarter of consecutive revenue growth.
The company has a remarkable streak of beating earnings estimates over the last four quarters. Equinix surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the beat being 3.93%, on average.
Equinix, Inc. Price and EPS Surprise
Equinix, Inc. price-eps-surprise | Equinix, Inc. Quote
Let’s see how things have shaped up prior to this announcement.
Factors at Play
In light of the growing demand for colocation and inter-connection services as well as higher demand from cloud users, Equinix has been actively expanding its infrastructure footprint and enhancing capabilities. The company is making efforts to strengthen its data-center footprint on the back of acquisitions and developments.
In January, it wrapped up the $175-million acquisition of three data centers from Axtel S.A.B. de C.V., which cater to Mexico City and Monterrey metro areas of Mexico. The buyout made the company one of the largest network-neutral data-center operators in Mexico. Moreover, in February, the company unveiled its fourth International Business Exchange (IBX) data center in Melbourne, Australia, and completed the acquisition of Packet, a top player in the bare metal automation platform, for a consideration of $335 million in March.
These efforts are expected to have aided the company in increasing its cabinet capacity and cabinet equivalent billing. Notably, the Zacks Consensus Estimate for first-quarter 2020 cabinet capacity is pegged at 302,064, suggesting a rise from 299,500 reported in fourth-quarter 2019. Further, cabinet equivalent billing is expected to increase from 239,000 to 241,984 over the same period.
Further, the company is expected to have continued enjoyed stable revenues in first-quarter 2020, owing to its recurring revenue model. Notably, the Zacks Consensus Estimate for first-quarter recurring revenues from the United States is pegged at $638 million, suggesting 3.7% growth from the prior-year quarter’s reported figure.
These are expected to have contributed to top-line growth during first-quarter 2020. Notably, the Zacks Consensus Estimate for first-quarter 2020 revenues is pinned at $1.45 billion, suggesting a 6.43% improvement year over year. Management projects March-end quarterly revenues at $1.45-$1.46 billion.
However, the company is expected to have incurred integration costs relating to its acquisitions. This is expected to have impacted the company’s earnings in the quarter.
Further, Equinix competes with neutral colocation providers, Internet service providers and Web-hosting facilities. This is expected to have made Equinix vulnerable to pricing pressure. Notably, the company is expected to witness a sequential decline in weighted average price per cabinet (MMR per cabinet) of $1,438 from its European operations.
Lastly, the Zacks Consensus Estimate of FFO per share for the quarter has declined marginally to $5.98 over the past month, reflecting analysts’ bearish sentiments. Also, it suggests year-over-year growth of 0.5%.
Earnings Whispers
Equinix does not have the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Equinix has an Earnings ESP of -2.56%
Zacks Rank: Equinix carries a Zacks Rank of 3, currently.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Warrant a Look
Here are a few stocks in the REIT 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:
Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI - Free Report) , scheduled to release earnings on May 7, has an Earnings ESP of +5.52% and a Zacks Rank of 3 at present.
SBA Communications Corporation (SBAC - Free Report) , set to report quarterly numbers on May 5, currently has an Earnings ESP of +0.67% and a Zacks Rank of 3.
Americold Realty Trust (COLD - Free Report) , expected to release earnings results on May 7, currently has an Earnings ESP of +9.74% and a Zacks Rank #3.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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