Lamar Advertising Co. LAMR reported fourth-quarter 2017 adjusted funds from operations (FFO) of $1.38 per share, comfortably surpassing the Zacks Consensus Estimate of $1.25. Also, the figure came in higher than the year-ago tally of $1.32.
Net revenues for the reported quarter increased 3.1% year over year to $398.5 million. In addition, the top line surpassed the Zacks Consensus Estimate of $396.2 million.
However, due to broader market concerns, its share price declined over 6% to $68.14 during Tuesday's regular trading session.
Results reflected a year-over-year rise in operating income, adjusted EBITDA and cash flow from operating activities.
For the full-year 2017, adjusted FFO per share came in at $5.05, 1% higher than the year-ago figure of $5.00. Further, revenues for the full year came in at $1.54 billion, up nearly 2.7% from $1.50 billion reported in 2016.
Quarter in Detail
Operating income increased to $120 million from $115.4 million recorded in the prior-year period. Adjusted earnings before interest, taxes, depreciation and amortization rose 2.7% year over year to $178.4 million. Additionally, free cash flow was up 1.1% year over year to $112.3 million.
At the fourth-quarter end, Lamar had total liquidity of $354.6 million, of which $239.1 million was available under its revolving senior credit facility and $115.5 million in cash and cash equivalents.
The company closed 11 acquisition transactions during the quarter for total purchase consideration of $177.4 million.
Our Take
Lamar’s efforts to upgrade its portfolio and increase occupancy in the company’s existing advertising displays prove conducive to its top-line growth. These efforts also help raise advertising rates. In fact, the company holds significant market share in the U.S. outdoor advertising business, which is encouraging.
Nonetheless, the gloomy environment in the national advertising market remains a concern for the company. Further, high investment expenditures for acquisitions are likely to take a toll on Lamar’s balance sheet.
Lamar Advertising Company Price, Consensus and EPS Surprise
Lamar currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other REITs
Here are a few other REIT companies that have reported their fourth-quarter 2017 results in February 2018.
Ventas, Inc. VTR reported fourth-quarter 2017 normalized FFO of $1.03 per share, in line with the Zacks Consensus Estimate. The figure also matched the year-ago quarter tally. Results reflect improved property performance and accretive investments.
Cousins Properties, Inc. CUZ reported fourth-quarter 2017 FFO per share of 15 cents, surpassing the Zacks Consensus Estimate by a penny. Results reflect better-than-expected revenues in the quarter. Further, a rise in second-generation net rent-per-square-foot on a cash basis was experienced.
PS Business Parks, Inc. PSB reported fourth-quarter 2017 core FFO of $1.52 per share, missing the Zacks Consensus Estimate by a penny. However, the figure came in 9.4%, higher than $1.39 recorded in the prior-year quarter. The rise on a year-over-year basis stemmed from higher NOI, reduced general and administrative expenses, and savings from lower preferred distributions.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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