Lamar Advertising (LAMR) Q1 FFO, Revenues Grow Y/Y, Stock Up

Lamar Advertising Company (NASDAQ:LAMR) reported first-quarter 2018 adjusted funds from operations (FFO) of 98 cents per share, marking an 11.4% increase from the year-ago tally of 88 cents.

Results were driven by growth in revenues. Particularly, net revenues for the reported quarter climbed 4.2% from the prior-year quarter to $361.0 million.

Reflecting positive sentiments, the company’s shares rallied more than 3.5% to $66.98, during Wednesday's regular trading session.

Quarter in Detail

Operating income dipped to $65.9 million from $75.5 million recorded in the prior-year period. However, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 8.3%, year over year, to $138.9 million, reflecting benefits from the company’s cost-containment efforts. Additionally, free cash flow of $81.3 million in the first quarter was up 6.6% year over year.

At the end of first-quarter 2018, Lamar had total liquidity of $272.1 million, of which $262.1 million was available under its revolving senior credit facility, and $10.0 million in cash and cash equivalents.

Our Take

Lamar’s impressive national presence, tenants from diverse industries and valuable permits augur well for its growth. Moreover, the company’s strategy to focus on portfolio upgradation and expansion is expected to drive long-term profitability. Efforts to control expenses also prove conducive. Nonetheless, the dreary 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. Rate hike remains another concern.

Lamar currently has a Zacks Rank #3 (Hold). 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 Apartment Investment and Management Company (NYSE:AIV) , EPR Properties (NYSE:EPR) and Realty Income Corporation (NYSE:O) . While Apartment Investment and Management Company is scheduled to release earnings on May 7, EPR Properties and Realty Income are slated to report quarterly numbers on May 8.

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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