(RTTNews) - Information protection and storage services provider Iron Mountain Inc. (IRM: News ) reported Thursday a sharp rise in third-quarter profit, despite a 2% drop in revenues, as margins improved from the prior year helped by improved storage gross margin and productivity gains in North America. The company also provided revenue guidance for the fourth quarter and revised its full year revenue forecast.

For the third quarter, net income attributable to the Boston, Massachusetts-based company surged to $43.19 million or $0.21 per share from $11.31 million or $0.06 per share in the previous year.

Effective tax rate was impacted by net foreign currency gains and the associated tax expense and several discrete tax items, which decreased earnings by $0.03 per share for the quarter. Excluding items, the company reported earnings of $0.24 per share for the quarter.

On average, eight analysts polled by Thomson Reuters expected the company to earn $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

In its second quarter, net income attributable to Iron Mountain was $88 million, or $0.43 per share, up from $36 million or $0.18 per share a year ago, driven by higher operating income and reduced interest expense.

Total revenues for the third quarter declined 2% to $764.88 million from $784.34 million in the comparable quarter a year ago. The company recorded a storage revenue internal growth of 7%, which more than offset the expected weakness in service revenue growth. Analysts expected the company to report revenues of $774.56 million for the quarter.
The year-over-year weakening of major foreign currencies including the British pound and the Canadian dollar against the U.S. dollar reduced the revenue growth rate by 4% compared to the year-ago quarter, the company noted.

Storage revenues increased to $433.07 million from $421.67 million in the previous year. According to the company, solid storage revenue internal growth in the North American Physical and International Physical business segments offset economic pressures on digital revenues and activity-based service revenues related to the handling and transportation of items in storage and secure shredding.

Service revenues fell to $331.82 million from $362.66 million in the preceding year. The company noted that complementary service revenues decreased year-over-year, mainly due to lower recycled paper prices and softness in the more discretionary revenues, such as project revenues and fulfillment services.

In its immediately preceding second quarter, the company's total consolidated revenues declined to $746 million from $769 million last year.

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