American Tower Corp. AMT reported mixed financial numbers for the first quarter of 2015. Net income of $193.3 million or 45 cents per share in the quarter deteriorated from the year-ago quarter’s $202.5 million or 51 cents per share, respectively. Moreover, the earnings number missed the Zacks Consensus Estimate of 53 cents.
Total revenue of $1,079 million increased 9.7% year over year and surpassed the Zacks Consensus Estimate of $1,067 million.
Adjusted EBITDA in the reported quarter stood at $723.7 million, up 13.0% year over year. Adjusted EBITDA margin came in at 67% against 65% in the first quarter of 2014. Selling, general & administrative expenses totalled $123.3 million compared with $110.0 million in the year-earlier quarter. Operating income was $420 million, up 18.8% year over year. In the reported quarter, Adjusted Funds from Operations (AFFO) grew 16.9% year over year to $513.6 million or $1.25 per share.
At the end of the quarter under review, the company had $323.4 million in cash and cash equivalents and around $14,931.0 million of outstanding debt compared with $313.5 million and $13,711.1 million at the end of 2014, respectively. Meanwhile, the debt-to-capitalization ratio stood at 0.67 against 0.77 at the end of 2014.
Domestic Rental and Management Segment
Quarterly revenues were $717.9 million, up 12.9% year over year. Gross margin came in at 81.5% versus 80.9% in the year-ago quarter. Operating profit margin stood at 78%, compared to 77% in the year-ago quarter.
International Rental and Management Segment
Quarterly revenues grossed $344.3 million, signifying a 6.2% year-over-year increase. Gross margin for the segment was 64.2% compared with 61% in the year-ago quarter. Operating margin stood at 54% versus 52% in the prior-year quarter.
Network Development Services Segment
Quarterly revenues totaled $17.0 million, exhibiting a decline of 29% year over year. Gross margin was 69.2% compared with 59.1% in the year-earlier quarter. Operating margin was 49%, flat year over year.
Tower Count
At the end of the first quarter of 2015, American Tower managed 87,197 communications towers. Geographically, the company operates 40,048 wireless towers in the U.S. and 47,149 wireless towers outside the nation.
Financial Outlook
For 2015, total revenue from the Rental & Management segment is projected in the range of $4,555–$4,605 million. Adjusted EBITDA is anticipated in the band of $2,990–$3,030 million. AFFO is estimated at around $2,035–$2,075 million. Meanwhile, net income is forecasted at $830–$860 million while capital expenditure is projected in the $850–$950 million range.
Stocks to Consider
American Tower currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Blackstone Mortgage Trust Inc. BXMT, New Residential Investment Corp. NRZ and New York Mortgage Trust Inc. NYMT. All the three stocks carry a Zacks Rank #1 (Strong Buy).
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