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Lamar Advertising Company LAMR reported fourth-quarter 2020 adjusted funds from operations (FFO) per share of $1.71, outpacing the Zacks Consensus Estimate of $1.50. Moreover, the figure is up from the $1.64 reported in the year-ago period.
Results reflect better-than-expected revenue numbers for the quarter. Also, the company benefited from a fall in operating expenses.
Particularly, quarterly net revenues came in at $428.5 million, surpassing the consensus mark of $416.4 million. However, on a year-over-year basis, net revenues for the quarter declined 7.4%.
Reflecting broader market sentiments, shares of the company edged down 0.3% during Friday’s regular trading session.
According to the company’s chief executive Sean Reilly, “We concluded 2020 with a strong fourth quarter, aided by a recovery in national advertising and a surge in political spending, as well as further good work on the expense side."
Moreover, he pointed that, "We have begun to invest again in our platform, and, with the strongest balance sheet in the industry, we are positioned well to benefit as the advertising market recovers further in 2021.”
For full-year 2020, the company reported adjusted FFO per share of $5.10, down from the prior year’s $5.80. Net revenues declined 10.5% to $1.57 billion from the $1.75 billion reported last year.
Quarter in Detail
Acquisition-adjusted net revenues for the fourth quarter decreased 6.8% year on year to $428.5 million. Also, acquisition-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 2.8% to $207.9 million.
Operating income marginally declined to $141.2 million from the year-earlier period’s $141.4 million, while adjusted EBITDA went down 3.6% to $207.9 million. However, free cash flow of $160.1 million increased 18.3% year over year during the December-end quarter.
Operating expenses slid 10.6% from the prior-year quarter to $287.3 million.
At the end of 2020, Lamar Advertising had total liquidity of $910.1 million. This comprised $736 million available for borrowing under its revolving senior credit facility, $52.5 million available under the Accounts Receivable Securitization Program, and $121.6 million in cash and cash equivalents.
Lamar Advertising projects 2021 adjusted FFO per share at $5.20-$5.50. The Zacks Consensus Estimate for the same is currently pinned at $6.55.
On Feb 25, Lamar announced a quarterly dividend of 75 cents per share, which reflects a 50% increase from the 50 cents paid in the prior quarter. The dividend will be paid on Mar 31, 2021, to stockholders of record of Lamar’s Class A and Class B common stock as of Mar 22, 2021.
Lamar predicts total quarterly distributions to stockholders in 2021 to aggregate $3.00 per common share, inclusive of the dividend payable on Mar 31, 2021.
Lamar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lamar Advertising Company Price, Consensus and EPS Surprise
Lamar Advertising Company price-consensus-eps-surprise-chart | Lamar Advertising Company Quote
Performance of Other REITs
OUTFRONT Media Inc. OUT delivered fourth-quarter 2020 adjusted FFO per share of 35 cents, outpacing the Zacks Consensus Estimate of 27 cents. In the prior-year quarter, the company had reported adjusted FFO per share of 73 cents. Results underlined a decline in operating expenses, and selling, general and administrative expenses. However, a decline in revenues on dwindling demand for its services is a concern.
Extra Space Storage, Inc. EXR reported core FFO per share of $1.48, beating the Zacks Consensus Estimate of $1.35 in the October-December quarter. The figure came in 16.5% higher than the prior-year quarter’s $1.27. Results reflected strong average occupancy and higher average rates to existing customers for the quarter, partially offset by lower late fees. The company also witnessed reductions in most expense categories, partly muted by rise in property taxes.
PS Business Parks, Inc. PSB posted core FFO per share of $1.66, topping the Zacks Consensus Estimate of $1.64 for the December-end quarter. In addition, the reported figure increased from the $1.65 reported in the year-ago period. Results highlighted increased cash rental income from the occupied portion of its same-park portfolio, though lower weighted average occupancy in the quarter played spoilsport.
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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