American Tower (AMT) Q3 AFFO Tops Estimates, Revenues Rise Y/Y
American Tower Corporation AMT reported third-quarter 2020 adjusted funds from operations (AFFO) per share of $2.23, beating the Zacks Consensus Estimate of $2.08. Further, the reported figure improved 15.5% year over year.
The company generated total revenues of $2.01 billion, which outpaced the Zacks Consensus Estimate of $1.97 billion. Moreover, the figure improved 3% year over year.
The company witnessed strong organic tenant billing growth. Moreover, robust revenue growth in the Africa and Europe property segments supported top-line improvement.
Quarter in Detail
Adjusted EBITDA in the reported quarter was $1.29 billion, up 5.6% from the prior-year quarter. Adjusted EBITDA margin was 64.5% in the third quarter of 2020. Operating income was $785.1 million, up 7.8% from the year-ago quarter’s figure.
During the third quarter, the company spent around $101 million to acquire 305 communication sites primarily in international markets.
Cash Flow and Liquidity
In the third quarter of 2020, American Tower generated $960 million of cash from operating activities, rising 2.5% year over year. Free cash flow during the period was $710 million, up 7.5% year over year.
At the end of the third quarter, the company had $6.7 billion of total liquidity. This comprised $1.6 billion in cash and cash equivalents, and availability of $5.1 billion under its revolving credit facilities (net of any outstanding letters of credit).
Property Segment
Quarterly revenues grossed $1.99 billion, up 3.4% year over year. Operating profit was $1.33 billion and operating profit margin was 67% during third-quarter 2020.
In the Property segment, revenues from the United States totaled $1,122 million, up 2.4% year over year. Further, total international revenues amounted to $885 million, up 4.8% year over year.
Within this, revenues from Asia totaled $305 million, declining 2.3 % year over year, while Latin America revenues totaled $301 million, down 9.1% year over year. Africa revenues grossed $220 million, up 48.4% year over year, while Europe revenues of $39 million improved 16.2% from the year-ago period.
Services Segment
Quarterly revenues totaled $25.3 million, down 20.9% year over year. Operating profit was $11 million and operating profit margin was 43% during the September-end quarter.
Outlook
For 2020, American Tower anticipates property revenues of $7,855-$7,915 million, reflecting a year-over-year improvement of 5.6% at the mid-point. Adjusted EBITDA is projected at $5,075-$5,125 million, indicating a mid-point increase of 7.5% from the prior year. Consolidated AFFO is estimated to be $3,720-$3,770 million, suggesting a year-over-year mid-point expansion of 6.4%.
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
American Tower Corporation REIT price-consensus-eps-surprise-chart | American Tower Corporation REIT Quote
We now look forward to the earnings releases of other REITs like Lexington Realty Trust LXP, National Storage Affiliates Trust NSA and Ventas, Inc. VTR. While Lexington Realty and National Storage Affiliates are slated to report third-quarter earnings on Nov 5, Ventas will release earnings on Nov 6.
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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