Lamar Advertising (LAMR) Stock Declines 4.89% on Q2 AFFO Miss
Lamar Advertising Company LAMR shares declined 4.89% during Thursday’s regular trading session after this REIT reported a 2.1% year-over-year decrease in adjusted funds from operations (AFFO) per share for the second quarter.
LAMR reported a second-quarter AFFO per share of $1.90 compared with the year-ago quarter’s $1.94. However, the figure missed the Zacks Consensus Estimate of $1.94.
Results reflect year-over-year growth in the top line. However, higher interest expenses acted as a dampener. The company revised its outlook for 2023.
Quarterly net revenues came in at $541.1 million, marginally surpassing the consensus mark of $539.7 million. Net revenues for the quarter increased 4.5% on a year-over-year basis.
Quarter in Detail
Operating income of $176.8 million increased from the year-earlier period’s $166.5 million, while the adjusted EBITDA increased 4.3% to $253.9 million.
Acquisition-adjusted net revenues for the second quarter climbed 2.7% year over year. Also, acquisition-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 2.9%.
Interest expenses increased 48% year over year to $43.6 million during the reported quarter.
Moreover, free cash flow of $159.2 million decreased 4.4% year over year during the reported quarter.
Balance Sheet
As of Jun 30, 2023, Lamar Advertising had total liquidity of $661.1 million. This comprised $608.3 million available for borrowing under its revolving senior credit facility, $5 million under its Accounts Receivable Securitization Program and $47.8 million in cash and cash equivalents.
2023 Guidance
Per management, the company observed a slowdown in business activity as it moved into the third quarter and is expecting lower revenues in the second half of the year. As a result, LAMR revised its guidance for 2023 AFFO in the range of $7.13 to $7.28 per share from $7.40 to $7.55 per share guided earlier. The Zacks Consensus Estimate for the same is currently pegged at $7.49.
Lamar Advertising Company Price, Consensus and EPS Surprise
Lamar Advertising Company price-consensus-eps-surprise-chart | Lamar Advertising Company Quote
Lamar Advertising currently 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
Iron Mountain Incorporated IRM reported second-quarter AFFO per share of 94 cents, surpassing the Zacks Consensus Estimate by a whisker. Moreover, the figure improved 1.1% on a year-over-year basis, attributable to improved adjusted EBITDA.
IRM’s results reflect solid performance in the storage segment and the data-center business. However, higher operating expenses in the quarter were a concern. The company reaffirmed its outlook for 2023.
Welltower Inc.’s WELL second-quarter 2023 normalized FFO per share of 90 cents surpassed the Zacks Consensus Estimate of 86 cents. The reported figure improved 4.7% from the prior-year quarter.
Results reflect better-than-anticipated revenues. The total same-store net operating income (SSNOI) increased year over year, driven by SSNOI growth in the seniors housing operating portfolio. WELL also raised its guidance for 2023 normalized FFO per share.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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