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American Tower (AMT) Q1 AFFO Beats Estimates, 2022 Outlook Up

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American Tower Corporation AMT reported first-quarter 2022 adjusted funds from operations (AFFO) for common stockholders of $2.55 per share, which beat the Zacks Consensus Estimate by a penny. The bottom line improved 3.7% year over year.

The company generated total revenues of $2.66 billion, which beat the consensus mark of $2.61 billion. Also, the top line jumped 23.2% year over year.

Results reflect improving revenues across both Property and Service operations. American Tower also recorded decent year-over-year organic tenant billings growth of 3%.

Quarter in Detail

The adjusted EBITDA came in at $1.62 billion, up 12.8% from the prior-year period. The adjusted EBITDA margin was 61% in the quarter.

The operating income summed $725.1 million, down 12.5% year over year.

During the reported quarter, American Tower spent roughly $129 million on acquisitions, of which nearly $30 million was paid to acquire 27 communications sites and other communications infrastructure assets across the United States, Canada and Nigeria. The remaining balance represented cash paid associated with sites acquired in 2021.

Property Operations

Revenues came in at $2.6 billion, up 22.1% on a year-over-year basis. Operating profit was $1.66 billion, and operating profit margin came in at 64%.

In the Property segment, revenues from the United States totaled $1.23 billion, up 0.3% year over year. The total international revenues amounted to $1.18 billion, jumping 31.8%. Further, the newly formed Data Centers added $184 million to Property revenues, up substantially from $3 million in the prior year.

Services Operations

Revenues totaled $60 million during the reported quarter, significantly up from $29 million in the prior-year quarter. Operating profit came in at $26 million, and the operating profit margin was 43% in the March end quarter.

Cash Flow and Liquidity

In the first quarter, American Tower generated $664 million of cash from operating activities, down 39.3% year over year. Free cash flow in the period was $269, plunging 64.5%.

At the end of the first quarter, the company had $4.2 billion in total liquidity. This comprised $1.9 billion in cash and cash equivalents and availability of $2.2 billion under its revolving credit facilities (net of any outstanding letters of credit).

Updated 2022 Outlook

American Tower now anticipates total property revenues of $10,295-$10,475 million, suggesting a year-over-year improvement of 14% at the mid-point. Earlier, the company had targeted total property revenues of $10,220-$10,400 million.

Now adjusted EBITDA is projected at $6,555-$6,665 million, indicating a mid-point increase of 10.5%. This is up from prior guidance of $6,500-$6,610 million.

The consolidated AFFO is expected to be $4,705-$4,815 million, implying a year-over-year mid-point expansion of 8.8%. The same was earlier expected to be $4,700-$4,810 million.

Further, AFFO for common stockholders is now anticipated to be $4,545-$4,655 million, reflecting mid-point growth of 7.6%. Previously, AMT expected the same to be $4,535-$4,645 million.

Capital expenditure is projected to be $2-$2.1 billion.

American Tower Corporation Price, Consensus and EPS Surprise

American Tower Corporation Price, Consensus and EPS Surprise
American Tower Corporation Price, Consensus and EPS Surprise

American Tower Corporation price-consensus-eps-surprise-chart | American Tower Corporation Quote

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.

Performance of Other REITs

SBA Communications Corporation’s SBAC first-quarter AFFO per share of $2.96 surpassed the Zacks Consensus Estimate of $2.88. This reflects a rise of 14.7% from the prior-year quarter’s $2.58.

SBAC’s results reflect robust operating performance in site-leasing and development businesses, both on the domestic and international front. The company continues to benefit from the addition of sites to its portfolio.

Alexandria Real Estate Equities, Inc. ARE reported first-quarter 2022 adjusted funds from operations (FFO) per share of $2.05, surpassing the Zacks Consensus Estimate of $2.00. The reported FFO per share also compared favorably with the year-ago quarter’s $1.91.

ARE witnessed continued healthy leasing activity and rental rate growth during the quarter. Rental revenues in the quarter were $615.1 million, up 28.2% from the prior-year quarter.

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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