Lamar (LAMR) Q1 FFO Beats Estimates on Higher Revenues - Analyst Blog
Helped by an increase in revenues, Lamar Advertising Co. LAMR reported first-quarter 2015 adjusted Funds From Operations (“FFO”) of 82 cents per share, well ahead of the Zacks Consensus Estimate of 72 cents and the year-ago quarter figure of 62 cents.
Net revenue for the reported quarter increased 6.2% year over year to $302.5 million, exceeding the Zacks Consensus Estimate of $296 million.
Quarter in Detail
Operating income more than doubled to $67.3 million in first-quarter 2015 from $31.1 million in the comparable prior-year period. The company experienced an increase of 6.7% in its local revenue on billboards and a hike of 2.5% in national revenue on billboards. Moreover, pro forma analog bulletin revenues registered growth of 3.5.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 13.6% year over year to $118.5 million. Moreover, free cash flow in the reported quarter increased 23.1% year over year to $62.9 million.
Lamar had total liquidity of $303.7 million at quarter-end, of which $271.2 million was available under its revolving senior credit facility and $32.5 million in cash and cash equivalents.
Outlook
Lamar believes that its first-quarter results have helped it tracking the high end of its previously offered full-year targets for sales and adjusted FFO. Notably, the company earlier provided adjusted FFO guidance in the range of $4.34 to $4.45.
Our Take
Lamar, on the back of improving operational performance, continue to trend on the growth track. The company’s transformation to a real estate investment trust (“REIT”), its diversified tenant base, impressive national footprint and its healthy balance sheet bode well for future growth.
Lamar currently has a Zacks Rank #3 (Hold). Investors can consider stocks like Prologis, Inc. PLD, SL Green Realty Corp. SLG and Ventas, Inc. VTR. All these stocks hold a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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