Digital Realty to Post Q1 Earnings: What's in the Cards for the Stock?

Core Viewpoint - Digital Realty Trust (DLR) is expected to report year-over-year growth in revenues and funds from operations (FFO) per share for the first quarter of 2025, with results anticipated on April 24 [1] Financial Performance - In the prior quarter, Digital Realty reported a core FFO per share of $1.73, exceeding the Zacks Consensus Estimate of $1.70, driven by steady leasing momentum and improved rental rates despite higher operating expenses [2] - Over the last four quarters, Digital Realty's core FFO per share surpassed the Zacks Consensus Estimate three times, with an average beat of 1.36% [3] Market Position and Demand - Digital Realty benefits from a global footprint of 308 data centers across more than 50 metropolitan areas, capitalizing on strong demand driven by digital transformation, cloud computing, and artificial intelligence [3][4] - The company has a high-quality, diversified customer base, primarily consisting of investment-grade tenants from various industries, which is expected to support stable revenue generation [5] Revenue Projections - The Zacks Consensus Estimate for rental revenues in the first quarter is $972.3 million, reflecting an 8.7% increase from $894.4 million in the same quarter last year [6] - Total revenue is projected at $1.42 billion, indicating a year-over-year increase of 6.8% [6] Interest Rate Impact - High interest rates are anticipated to negatively affect quarterly performance by increasing borrowing costs, which may hinder the company's ability to purchase or develop real estate [7] Analyst Sentiment - The Zacks Consensus Estimate for quarterly FFO per share has slightly decreased to $1.73, representing a year-over-year growth of 3.6% [8] - The current Earnings ESP for Digital Realty is 0.00%, and it holds a Zacks Rank of 3, indicating no strong prediction for a surprise in FFO this quarter [9]