Iron Mountain Earnings: Margins Shrink, but Net Income Rises

Falling revenue did not prevent S&P 500 (NYSE:SPY) component Iron Mountain Inc. (NYSE:IRM) from reporting a profit boost in the third quarter. Iron Mountain provides information protection and storage services to clients throughout the globe.

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Iron Mountain Inc. Earnings Cheat Sheet

Results: Net income for Iron Mountain Inc. rose to $52.8 million (31 cents per share) vs. $37.3 million (19 cents per share) in the same quarter a year earlier. This marks a rise of 41.4% from the year-earlier quarter.

Revenue: Fell 2.6% to $748.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Iron Mountain Inc. reported adjusted net income of 34 cents per share. By that measure, the company fell short of mean estimate of 35 cents per share. Analysts were expecting revenue of $761.2 million.

Quoting Management: “Our underlying financial performance for the third quarter reflects the stability of our storage rental business and successful execution of our strategy. Storage rental is the primary driver of revenues, profits and cash flows for the Company and has grown solidly within a 3% to 5% C$ range since 2010 underscoring its durability,” said Richard Reese, Iron Mountain’s Chairman and Chief Executive Officer. “Reported results were negatively impacted by significantly lower recycled paper prices and weakened foreign currencies. Our organization is performing well and remains on-track towards achieving our financial targets for the year. Iron Mountain is a durable, high-return business with significant opportunities to grow cash flow for a very long time.”

Key Stats:

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 35 cents versus a mean estimate of net income of 31 cents per share.

Looking Forward: Over the last 30 days, analysts have not been optimistic about the company’s next-quarter performance. The average estimate for the fourth quarter is now 30 cents per share, down from 31 cents. For the fiscal year, the average estimate has moved down from $1.31 a share to $1.30 over the last thirty days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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