American Tower (AMT) Q2 FFO & Revenues Top Estimates, View Up

American Tower AMT reported solid results for the second quarter of 2018, wherein the bottom line and revenues surpassed the Zacks Consensus Estimate.

Consolidated adjusted funds from operations (AFFO) came in at $844 million compared with $725 million in the year-ago quarter. AFFO per share came in at $1.90, beating the Zacks Consensus Estimate of $1.78. Further, this compares favorably to FFO of $1.68 per share reported in the prior year.

The company posted total revenues of $1.78 billion, beating the Zacks Consensus Estimate of $1.75 billion. The figure increased 7.2% year over year.

Operating Metrics

Adjusted EBITDA in the reported quarter was $1,084 million, up 6.2% from the prior-year quarter. Adjusted EBITDA margin was 60.9% in the quarter under review. Selling, general, administrative and development expense totaled $157.9 million compared with $153.1 million incurred in the year-earlier quarter. Operating income was $546 million compared with $576.9 million in the year-ago quarter.

Cash Flow and Liquidity

In the second quarter of 2018, American Tower generated $940 million of cash from operations, up 18.2% year over year. Free cash flow in the reported quarter was $712 million, up 21.7% year over year.

At the end of the reported quarter, the company had $834.5 million in cash and cash equivalents and around $18,322 million of outstanding long-term debt compared with $802.1 million and $19,430.3 million, respectively, witnessed at the end of December 2017.

Property Segment

Quarterly revenues grossed $1,749 million, up 6.8% year over year. Operating profit was $1,104 million and operating profit margin was 63% in the April-June quarter.

In the Property segment, revenues from the United States totaled $957 million, up 6.7% year over year. Total international revenues amounted to $792 million, up 7% year over year. Within this, revenues from Asia totaled $308 million, up 4.5% year over year. EMEA revenues grossed $167 million, up 4.4% year over year. Latin America revenues totaled $318 million, up 10.8% year over year.

Services Segment

Quarterly revenues totaled $31.5 million compared with $24.4 million in the year-ago quarter. Operating profit was $16 million and operating profit margin was 50% in the reported quarter.

Cash Dividend Payment

In second-quarter 2018, American Tower’s board of directors announced a cash distribution of 77 cents per share to the common stockholders of record as of the closure of business on Jun 19, paid on Jul 13, 2018.

Outlook for 2018

For 2018, American Tower anticipates property revenues of $6,840 to $6,970 million, reflecting growth of 5.2% at the mid-point. Net income is expected between $1,275 million and $1,335 million, marking growth of 6.5% at the mid-point. Adjusted EBITDA is projected at $4,255-$4,315 million, indicating mid-point growth of 4.8%. Consolidated AFFO is expected in the range of $3,200-$3,260 million, reflecting mid-point growth of 11.3%.

Currently, American Tower carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We now look forward to the earnings releases of other REITs like The Macerich Company MAC, Federal Realty Trust FRT and Mark Cali Realty CLI. All three companies are scheduled to report their Q2 numbers on Aug 1.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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