Iron Mountain Reports Mixed 4Q - Analyst Blog
01 3월 2013 - 10:30PM
Zacks
Iron Mountain Inc.
(IRM) reported fourth quarter 2012 adjusted earnings per share from
continuing operations of 20 cents, which fell shy of the Zacks
Consensus Estimate of 25 cents. Earnings in the quarter slumped
39.4% from the year-ago quarter due to higher interest expense and
higher operational costs.
Quarter
Details
Revenues for the quarter increased
a modest 2.3% from the year-ago quarter to $758.5 million and
surpassed the Zacks Consensus Estimate of $751.0 million. The
better-than-expected result was aided by higher storage rental
revenues (up 4.5% year over year), which fully offset the 0.7% dip
in service revenues.
During the quarter, Iron Mountain
witnessed robust growth in Document Management Solutions segment
and storage-related services in Latin America. Moreover, increase
in international storage rental volumes (up 9% year over year)
helped Global storage volume growth of 1.8% from the year-ago
period. However, decrease in activity-based service revenues and
lower recycled paper revenues were primarily responsible for the
decline in service revenues.
Adjusted OIBDA was down 13.1% year
over year to $207 million. Adjusted OIBDA margin declined 480 basis
points on a year-over-year basis to 27.2%, due to lower service
revenue and shut down costs related to facilities in the United
Kingdom and the southeast United States. Moreover,
higher-than-expected selling, general and administrative (SG&A)
expenses and acquisition costs also led to the decline.
Operating income in the quarter
decreased 31.4% from the year-ago quarter to $102 million, due to
higher operating expenses (up 10.7% year over year). Interest
expense increased 10.7% on a year-over-year basis on borrowings
related to stockholder payout programs and costs related to Iron
Mountain’s proposed conversion to real estate investment trust
(“REIT”).
Net income from continuing
operations was $27 million versus $47 million earned in the
previous-year quarter.
Iron Mountain exited the quarter
with cash and cash equivalents of $243.4 million compared with
$334.6 million at the end of the previous quarter. Long-term debt
(including the current portion) was $3.35 billion compared with
$3.74 billion in the previous quarter.
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 share holders value are the other
positives.
However, costs related to the
conversion and decline in recycled paper prices are the near-term
headwinds for the company. Additionally, volatile foreign exchange
rates and competition from Hertz Global Holdings
(HTZ), National Research (NRCI) and
Guidance Software Inc (GUID) are the other
headwinds.
Currently, Iron Mountain has a
Zacks Rank #3 (Hold).
GUIDANCE SOFTWR (GUID): Free Stock Analysis Report
HERTZ GLBL HLDG (HTZ): Free Stock Analysis Report
IRON MOUNTAIN (IRM): Free Stock Analysis Report
NATL RESEARCH (NRCI): Free Stock Analysis Report
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Zacks Investment Research
National Research Corp. (MM) (NASDAQ:NRCI)
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National Research Corp. (MM) (NASDAQ:NRCI)
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