American Tower (AMT) Tops Q2 Earnings, Lags Revenues

American Tower Corp. (NYSE:AMT) reported strong financial numbers for the second quarter of 2016, with both the top and bottom lines outpacing the respective Zacks Consensus Estimate.

This Zacks Rank #3 (Hold) company competes with Crown Castle International Corp. (NYSE:CCI) , SBA Communications Corp. (NASDAQ:SBAC) and Equinix Inc. (NASDAQ:EQIX) in the highly contested wireless tower operator industry.

The company reported quarterly earnings per share of $1.38, well ahead of the Zacks Consensus Estimate of $1.33. GAAP net income also increased 24.4% year over year to $160.8 million.

Total revenue of $1,442.2 million increased 22.8% year over year but lagged the Zacks Consensus Estimate of $1,445 million.

Adjusted EBITDA in the reported quarter was $869 million, up 14%. Adjusted EBITDA margin was 60.2%, flat year over year. Selling, general & administrative expenses totalled $138.2 million, compared with $116.3 million in the year-ago quarter. Operating income was $432.8 million, up 11%.

During the second quarter of 2016, funds flow from operations (FFO) totalled $508 million, up 20.3% year over year. Quarterly consolidated adjusted funds flow from operations (AFFO) was $592 million, up 10.3% year over year.

At the end of the second quarter, the company had $410.5 million in cash and cash equivalents, and around $18,717.1 million of outstanding debt, compared with the 2015-end levels of $320.7 million and $17,068.8 million, respectively. Meanwhile, at second quarter end, the debt-to-capitalization ratio was 0.73 versus 0.72 at the end of 2015.

Property Segment

Quarterly revenues grossed $1,426.2 million, up 23.6%. Segment gross profit margin came in at 68.3% versus 72.8% in the year-ago quarter. Within the Property segment, revenues from the U.S. totalled $830 million, up 3.4%. Total international revenues came in at $597 million, up a substantial 70.1%. Within this, revenues from Asia came in at $225 million, up a whopping 275%, while EMEA revenues grossed $135 million, up a significant 92.9% year over year. Latin America revenues totalled $237 million, up 7.2%.

Services Segment

Quarterly revenues totalled $16 million, reflecting a decrease of 20.4%. Gross profit margin was 55.5% compared with 59.4% in the year-ago quarter.

Financial Outlook

For 2016, total revenue from the Property segment is projected in the range of $5,615–$5,705 million. Adjusted EBITDA is anticipated in the band of $3,500–$3,540 million. AFFO is estimated to be around $2,420–$2,460 million. Meanwhile, net income is predicted to be $965–$1,025 million, while capital expenditure should be in the $700–$800 million range.