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Iron Mountain (IRM) Q3 FFO Tops Estimates, Revenues Fall Y/Y

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Zacks Equity Research
·3 min read
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Iron Mountain Incorporated IRM reported third-quarter 2020 normalized funds from operations (FFO) per share of 61 cents, which beat the Zacks Consensus Estimate of 55 cents. However, the reported figure was 1.5% lower than the year-ago quarter’s 62 cents.

Revenues of $1.04 billion declined 2.1% year over year.  However, the top line outpaced the Zacks Consensus Estimate of $991.3 million.

Results reflect strength in the company’s core storage business. However, the service segment‘s performance was disappointingdue to the coronavirus outbreak-led concerns.

Adjusted FFO (AFFO) decreased 4.5% year over year to $213 million.

Quarter Details

Storage revenues were $696 million in the September-end quarter, highlighting a 3.8% year-over-year increase on a constant-currency basis. The company recorded 2.5% organic growth year over year.

Service revenues amounted to $340 million in the reported quarter, indicating a year-over-year fall of 12.2% on a constant-currency basis. Further, organic service revenues declined 13.5% year over year.

Adjusted EBITDA margin expanded 30 basis points (bps) to 35.7%.

Liquidity

The company exited the third quarter with $152 million of cash and cash equivalents, down from $193.6 million at 2019 end.

As of the third-quarter end, the company had total liquidity of $1.7 billion.

Dividend Update

On Nov 4, Iron Mountain announced a fourth-quarter common stock cash dividend of 61.85 cents per share. The dividend will be paid out on Jan 6, 2021 to shareholders of record at the close of business on Dec 15, 2020.

Project Summit Update

Iron Mountain’s transformation program — Project Summit — focuses on simplifying global structure, streamlining managerial structure and enhancing customer experience.

Project Summit is anticipated to deliver annual adjusted EBITDA benefits of $375 million exiting 2021. The total cost to implement the program is estimated to be approximately $450 million.

Iron Mountain Incorporated Price, Consensus and EPS Surprise

Iron Mountain Incorporated Price, Consensus and EPS Surprise
Iron Mountain Incorporated Price, Consensus and EPS Surprise

Iron Mountain Incorporated price-consensus-eps-surprise-chart | Iron Mountain Incorporated Quote

Iron Mountain currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We now look forward to the earnings releases of other REITs like Simon Property Group SPG, Taubmna Centers, Inc. TCO and Ventas, Inc. VTR. While Simon Property and Taubman Centers are slated to report third-quarter 2020 earnings on Nov 9, Ventas will release September-end results on Nov 6.

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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