Iron Mountain's 1Q Earnings In Line - Analyst Blog
May 01 2013 - 5:23AM
Zacks
Iron Mountain Inc. (IRM) reported first quarter
2013 adjusted earnings per share from continuing operations of 27
cents, in line with the Zacks Consensus Estimate. Reported earnings
in the quarter slumped 6.9% from the year-ago quarter due to
sluggish revenue and higher share count.
Quarter Details
Revenues for the quarter inched up 0.1% from the year-ago
quarter to $747.0 million. Reported revenues lagged the Zacks
Consensus Estimate of $763.0 million. Revenues for the quarter were
impacted by lower service revenues (down 5.2% year over year).
Revenues from storage increased 4% on a year-over-year basis.
Iron Mountain’s revenues were primarily driven by Document
Management Solutions segment and Global storage rental internal
growth. Moreover, increase in international storage rental volumes
(up 13.5% year over year) helped Global storage volume growth of
2.8% from the year-ago period. These factors offset Iron Mountain’s
revenue declines in its core service segment (developed markets)
and lower revenues from its shredding services in its International
Business segment.
Adjusted OIBDA increased 2.2% year over year to $227 million.
Adjusted OIBDA margin expanded 70 basis points on a year-over-year
basis to 30.5% based on international profit, overhead cost
controls in North America and a decline in corporate expenses.
Operating income in the quarter decreased 13.4% from the
year-ago quarter to $122.8 million, primarily due to higher
operating expenses (up 4.7% year over year). Net income from
continuing operations was $18.4 million versus $61.1 million earned
in the previous-year quarter.
Iron Mountain exited the quarter with cash and cash equivalents
of $229.9 million compared with $243.4 million at the end of the
previous quarter. Long-term debt (including the current portion)
was $3.85 billion.
Guidance
Iron Mountain reiterated its fiscal 2013 guidance. For fiscal
2013, Iron Mountain expects revenues in the range of $3.02 billion
to $3.10 billion. The company forecasts adjusted OIBDA between
$905.0 million and $935.0 million. Iron Mountain expects earnings
per share in the range of $1.13 to $1.24.
The company expects to spend approximately $290 million on
capital assets. Free cash flow is expected in the range of $320
million to $360 million for fiscal 2013.
Our Take
We believe that Iron Mountain’s strong product portfolio,
increasing market share and promising international business are
the primary growth catalysts for the company. The company’s
decision to convert to REIT to reduce tax burden and increase
shareholders value are the other positives. Moreover, the company’s
entry into the data center market could act as a positive factor
going forward.
However, costs related to the conversion and fluctuations in
recycled paper prices are the near-term headwinds for the company.
Moreover, volatile foreign exchange rates and competition from
Hertz Global Holdings (HTZ), Pitney Bowes
Inc (PBI) and Guidance Software Inc
(GUID) are the other headwinds.
Currently, Iron Mountain has a Zacks Rank #4 (Sell).
GUIDANCE SOFTWR (GUID): Free Stock Analysis Report
HERTZ GLBL HLDG (HTZ): Free Stock Analysis Report
IRON MOUNTAIN (IRM): Free Stock Analysis Report
PITNEY BOWES IN (PBI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jul 2023 to Jul 2024