American Tower's (AMT) Q1 AFFO Misses, Revenues Top Estimates

American Tower Corporation (NYSE:AMT) reported first-quarter 2019 adjusted funds from operations (AFFO) per share of $1.84, missing the Zacks Consensus Estimate of $1.86. Nonetheless, the reported figure improved 6.4% from the year-ago tally of $1.73.

Results indicate growth in revenues from property segment as well improvement in adjusted EBITDA. However, cash from operations for the March-end quarter declined on a year-over-year basis.

The company posted total revenues of $1.81 billion, beating the Zacks Consensus Estimate of $1.80 billion. The figure climbed 4.1% year over year.

Operating Metrics

Adjusted EBITDA in the reported quarter was $1,114 million, up 38.2% from the prior-year quarter.

Adjusted EBITDA margin was 61.5% in the first quarter. Selling, general, administrative and development expenses totaled $198.1 million compared with $204.9 million incurred in the year-earlier quarter. Operating income was $614.9 million compared with $402.9 million reported in the year-ago quarter.

Cash Flow and Liquidity

In the first quarter of 2019, American Tower generated $785 million of cash from operations, edging down 0.8% year over year. Free cash flow in the first quarter was $555 million, down 5.3% year over year.

At the end of the reported quarter, the company had around $1 billion in cash and cash equivalents compared with $1.2 billion posted at the end of December 2018. Further, it had around $2.6 billion under its revolving credit facilities (net of any outstanding letters of credit).

Property Segment

Quarterly revenues grossed $1,786 million, up 4.4% year over year. Operating profit was $1,139 million and operating profit margin was 64% during first-quarter 2019.

Within the Property segment, revenues from the United States totaled $986 million, up 5.9% year over year. Total international revenues amounted to $800 million, up 2.7% year over year. Within this, revenues from Asia totaled $289 million, improving 5.8% year over year. EMEA revenues grossed $178 million, up 1.9% year over year. Latin America revenues totaled $333 million and inched up 0.5% year over year.

Services Segment

Quarterly revenues totaled $27 million, down 12.7% year over year. Operating profit was $14 million and operating profit margin was 51% in the quarter under review.

Outlook for 2019

For 2019, American Tower has revised its guidance and anticipates property revenues of $7,135-$7,285 million, reflecting decline of 1.4% at the mid-point. Net income is expected between $1,560 million and $1,660 million, marking growth of 27.3% at the mid-point. Adjusted EBITDA is projected at $4,420-$4,520 million, indicating a mid-point decline of 4.2%. Consolidated AFFO is estimated in the band of $3,375-$3,475 million, reflecting a mid-point contraction of 3.2%.

Currently, American Tower carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

American Tower Corporation (REIT) Price, Consensus and EPS Surprise

Performance of Other REITs

Cousins Properties Incorporated (NYSE:CUZ) reported FFO per share of 20 cents during the January-March quarter, in line with the Zacks Consensus Estimate. The figure came in higher than the prior-year quarter’s reported tally of 15 cents.

Duke Realty Corporation’s (NYSE:DRE) first-quarter 2019 core FFO per share of 33 cents surpassed the Zacks Consensus Estimate of 32 cents. Moreover, the figure came in higher than the year-ago quarter’s reported tally of 30 cents.

Ventas, Inc. (NYSE:VTR) delivered first-quarter normalized FFO of 99 cents, beating the Zacks Consensus Estimate of 96 cents. The reported figure, however, came in lower than the prior year’s $1.05.

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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