Iron Mountain (NYSE: IRM) ended 2024 on a sour note, with its fourth-quarter and full-year results falling short of Wall Street expectations. The disappointing earnings release triggered a sharp sell-off, causing the company’s stock to plummet by more than 7% on Thursday.
Quarterly Results Fall Just Short of Estimates
Iron Mountain, known for its document and records management services, reported fourth-quarter revenue of $1.58 billion, marking an 11% year-over-year increase and a new all-time quarterly high. On the earnings front, the company flipped to a net profit of nearly $106 million, a sharp turnaround from a loss of almost $34 million in the same quarter last year. On a per-share basis, adjusted earnings came in at $0.50.
Despite these improvements, the results were slightly below consensus analyst estimates, which had forecast revenue of $1.6 billion and adjusted earnings of $0.51 per share.
In a statement accompanying the earnings release, CEO William Meaney highlighted “strength across each of our business segments.” The company saw an 8% increase in storage rental revenue, which reached $942 million, while service revenue surged 17% to $639 million.
Looking Ahead: Guidance Offers Modest Optimism
Looking ahead to 2025, Iron Mountain provided guidance that suggests continued growth. The company expects total revenue to fall between $6.65 billion and $6.80 billion, signaling an approximate 9% year-over-year increase. Additionally, adjusted EBITDA is projected to grow by 12%, with a forecast range of $2.48 billion to $2.53 billion.
Missed Estimates Lead to Stock Sell-Off
While Iron Mountain’s results reflect solid growth and an optimistic outlook, the slight misses on analyst expectations appeared to have weighed heavily on investor sentiment. In the highly competitive world of earnings expectations, even small discrepancies can lead to significant market reactions, as seen with Thursday’s sharp decline.
Though the company’s overall performance remains strong, and its 2025 guidance is promising, investors were clearly disappointed by the narrow earnings miss. It appears that in this case, even positive growth wasn’t enough to offset market reactions to the shortfall in projections.
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