American Tower Corp.’s (AMT) third-quarter 2013 Adjusted Funds From Operations (:AFFO) were $367.3 million or 92 cents per share as compared with $295.3 million or 74 cents per share in the prior-year quarter. The figure outpaced the Zacks Consensus Estimate of 53 cents per share. Total revenue of $807.9 million increased 13.3% year over year, but was below the Zacks Consensus Estimate of $822 million.
Adjusted EBITDA in the reported quarter was $527.9 million, up 13.9% year over year. Adjusted EBITDA margin was 65%, flat with the prior-year quarter figure. Gross margin was 75.1% against 74.1% in the year-ago quarter. Selling, general & administrative expenses were $97.8 million compared with $81.5 million in the year-ago quarter. Operating income was $308.9 million, up 4.5% year over year. In the reported quarter, American Tower reported net income of $163.2 million, down 29.6% year over year.
At the end of the first nine months of 2013, American Tower generated $1.144.4 million in cash from operations, up 2.5% year over year. At the end of third-quarter 2013, American Tower had $4,067.8 million in cash and marketable securities and around $12,578.5 million in outstanding debt on its balance sheet compared with $374.6 million and $8,693.3 million at the end of 2012, respectively. The debt-to-capitalization ratio was 0.77 as compared with 0.70 at the end of 2012.
Domestic Rental and Management Segment
Quarterly revenues were $529.9 million, up 10.3% year over year. Gross margin came in at 82% compared with 80.8% in the year-ago quarter. Operating margin was 77%, flat with the year-ago quarter number.
International Rental and Management Segment
Quarterly revenues stood at $266.6 million, signifying a 22.7% year-over-year increase. Gross margin for the segment was 63.7% compared with 62.5% in the year-ago quarter. Operating margin was 52% against 51% in the year-ago quarter.
Network Development Services Segment
Quarterly revenues were $11.3 million, down by 28.5% year over year. Gross margin was 57.5% compared with 53.8% in the year-ago quarter. Operating margin was 41% versus 40% in the year-ago quarter.
At the end of the third quarter of 2013, American Tower managed 57,068 communications towers, of which 56,595 were for Wireless network and 473 for Broadcasting. Geographically, the company operates 22,480 wireless towers and 274 broadcast towers in the U.S. along with 34,115 wireless towers and 199 broadcast towers outside the U.S.
For 2013, total revenue from the Rental & Management segment is likely to be in the range of $3,250 million to $3,280 million. Adjusted EBITDA is anticipated in the band of $2,150 to $2,180 million. AFFO is estimated at around $1,455–$1,475 million. Net income is estimated in the range of $655–$695 million. Capital expenditure is expected in the $62–$675 million range.
Other Stocks to Consider
American Tower currently has a Zacks Rank #3 (Hold). Other stocks in the wireless tower industry include Crown Castle International Corp. (CCI), SBA Communication Corp. (SBAC) and Symmetricom Inc. (SYMM).