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Lamar (LAMR) Beats on Q3 Revenue Estimates, Raises 2021 View

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  • LAMR
  • WELL

Shares of Lamar Advertising Company LAMR gained 3.04% during Wednesday’s regular trading session after the REIT reported a 43.9% year-over-year jump in the adjusted funds from operations (FFO) per share to $1.90. Management raised the previously-issued guidance for 2021 on solid momentum, projecting adjusted funds from operations (FFO) per share at $6.35-$6.50 for the current year, prompting the stock to rally further.

Results reflect solid recovery in the U.S. advertising market. Quarterly net revenues came in at $476.9 million, surpassing the consensus mark of $463.3 million. Net revenues for the quarter increased 23.5% on a year-over-year basis.

According to the company’s chief executive Sean Reilly, "Our 2021 billboard revenue is expected to exceed our 2019 total, while transit is well on its way back to pre-pandemic levels and our logos business continues steady.”

Quarter in Detail

The acquisition-adjusted net revenues for the third quarter climbed 23.3%, year on year. Also, the acquisition-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 33.8%.

Operating income of $133.3 million increased from the year-earlier period’s $105.9 million, while the adjusted EBITDA jumped 35.2% to $230.7 million. Moreover, free cash flow of $173.7 million increased 36.6% year over year during the September-end quarter.

During the third quarter, the company closed eight acquisitions for a total cash purchase price of $80.4 million. This led to addition of more than 800 advertising displays.

Balance Sheet

At the end of third-quarter 2021, Lamar Advertising had total liquidity of $823.2 million. This comprised $735.7 million available for borrowing under its revolving senior credit facility, and $87.6 million in cash and cash equivalents.

Outlook

Lamar Advertising raised the guidance for 2021 based on the continued recovery from the COVID-19 pandemic during the current year. The company now projects the ongoing-year adjusted FFO per share at $6.35-$6.50 compared with the $6.10-$6.30 guided earlier.

Lamar Advertising Company Price, Consensus and EPS Surprise

Lamar Advertising Company Price, Consensus and EPS Surprise
Lamar Advertising Company Price, Consensus and EPS Surprise

Lamar Advertising Company price-consensus-eps-surprise-chart | Lamar Advertising Company Quote

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We now look forward to the earnings releases of other REITs, including Outfront Media Inc. OUT, Welltower Inc. WELL and Federal Realty Investment Trust FRT, scheduled to be out today.

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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