American Tower Corp. (AMT) reported mixed financial numbers for the fourth quarter of 2014. Net income of $180.4 million or 42 cents per share in the quarter improved from the year-ago tallies of $99.9 million or 25 cents per share, respectively. The earnings figure, however, missed the Zacks Consensus Estimate of 50 cents a share.
Total revenue of $1,046 million increased 11.1% year over year and was almost in line with the Zacks Consensus Estimate of $1,045 million.
Adjusted EBITDA in the reported quarter stood at $661 million, up 10.2% year over year. Adjusted EBITDA margin came in at 63% against 63.7% in the fourth quarter of 2013. Selling, general & administrative expenses totaled $129.1 million compared with $116.8 million in the year-earlier quarter. Operating income was $346 million, up 18.1% year over year. In the reported quarter, Adjusted Funds from Operations (AFFO) grew 16.8% year over year to $442 million or $1.10 per share.
At the end of the quarter under review, the company had $313.5 million in cash and cash equivalents and around $13,711.1 million of outstanding debt compared with $293.6 million and $14,408.1 million at the end of 2013, respectively. Meanwhile, the debt-to-capitalization ratio stood at 0.77 against 0.80 at the end of 2013.
Domestic Rental and Management Segment
Quarterly revenues were $680.7 million, up 9.3% year over year. Gross margin came in at 80.3% versus 80.2% in the year-ago quarter. Operating profit margin stood at 75%, flat year over year.
International Rental and Management Segment
Quarterly revenues grossed $349.2 million, signifying a 15.9% year-over-year increase. Gross margin for the segment was 61.9% compared with 64% in the year-ago quarter. Operating margin stood at 51%, down 3% year over year.
Network Development Services Segment
Quarterly revenues totaled $16.5 million, exhibiting a decline of 9% year over year. Gross margin was 56.7% compared with 54.9% in the year-ago quarter. Operating margin stood at 29% versus 43% in the year-earlier quarter.
Tower Count
At the end of the fourth quarter of 2014, American Tower managed 75,164 communications towers. Geographically, the company operates 28,566 wireless towers in the U.S. and 46,598 wireless towers outside the nation.
Financial Outlook
For 2015, total revenue from the Rental & Management segment is projected in the range of $4,250–$4,330 million. Adjusted EBITDA is anticipated in the band of $2,820–$2,900 million. AFFO is estimated at around $1,940–$2,000 million. Meanwhile, net income is forecasted at $805–$825 million while capital expenditure is projected in the $945–$995 million range.
Zacks Rank
American Tower currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Altisource Portfolio Solutions S.A. (ASPS), Anworth Mortgage Asset Corporation (ANH) and Ares Commercial Real Estate Corporation (ACRE). All three carry a Zacks Rank #2 (Buy).
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