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OUTFRONT Media (OUT) Q1 FFO Beats Estimates, Revenues Up Y/Y

·4 min read

OUTFRONT Media Inc. OUT reported first-quarter 2022 adjusted funds from operations (AFFO) per share of 23 cents. The figure marginally beat the Zacks Consensus Estimate of 22 cents.

The company’s first-quarter results reflect a rise in revenues, partially offset by higher operating expenses.

The quarterly revenues of $373.5 million outpaced the Zacks Consensus Estimate of $366.9 million. On a year-over-year basis, revenues increased 44.1% from $259.2 million.

According to Jeremy Male, chairman and CEO of OUTFRONT Media, "Q1 was another strong quarter, with total revenues up 44% year-over-year. High demand for our billboards, both static and digital, drove U.S. Billboard revenues up to levels nearly 20% above 2019."

Quarter in Detail

During the reported quarter, billboard revenues were $298.2 million, marking year-over-year growth of 33.4%. The upside resulted from higher average revenues per display (referred to as yield) compared with the prior-year quarter.

The company’s transit and other revenues of $75.3 million more than doubled from $35.6 million reported a year ago. The upswing mainly resulted from the increase in yield compared with the prior-year period.

OUTFRONT Media’s operating income totaled $28.5 million in the first quarter against a deficit of $31 million a year ago.

Operating expenses were $212.8 million, up 19.8% year over year. The rise was primarily due to costs associated with higher billboard and transit revenues. Also, higher guaranteed minimum annual payments to the New York Metropolitan Transportation Authority were a contributing factor.

Cash Flow & Balance Sheet

Net cash flow provided by operating activities in the quarter ended Mar 31, 2022, was $20.5 million against net cash flow used for operating activities of $10.8 million during the prior-year period.

As of Mar 31, 2022, OUTFRONT Media’s liquidity position comprised unrestricted cash of $355.7 million and $495.9 million of availability under its $500-million revolving credit facility, net of $4.1 million of issued letters of credit. In the quarter under review, the company sold no shares under its at-the-market (ATM) equity program and had $232.5 million available under the ATM program at the quarter’s end.

As of Mar 31, 2022, the company’s total debt was $2.7 billion, excluding $26.4 million of debt issuance costs. It included a $600 million term loan and $2.1 billion of senior unsecured notes.

Dividend Update

Concurrently, OUTFRONT Media announced its common stock quarterly cash dividend of 30 cents per share. The dividend will be paid out on Jun 30 to its shareholders recorded as of Jun 3, 2022.

Currently, OUTFRONT Media has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

OUTFRONT Media Inc. Price, Consensus and EPS Surprise

OUTFRONT Media Inc. Price, Consensus and EPS Surprise
OUTFRONT Media Inc. Price, Consensus and EPS Surprise

OUTFRONT Media Inc. price-consensus-eps-surprise-chart | OUTFRONT Media Inc. Quote

Performance of Other REITs

Cousins Properties Incorporated’s CUZ first-quarter 2022 FFO per share of 67 cents came in line with the Zacks Consensus Estimate.

Total revenues aggregated $186.9 million, exceeding the Zacks Consensus Estimate of $184.7 million.

On a year-over-year basis, CUZ’s FFO per share and total revenues declined 2.9% and 1.4%, respectively.

The slight growth in revenue was offset by a rise in operating expenses during the first-quarter. Leasing activity fell year-over-year.

Mid-America Apartment Communities, Inc. MAA, commonly referred to as MAA, reported first-quarter 2022 core FFO per share of $1.97, surpassing the Zacks Consensus Estimate of $1.92. The reported number increased 20.1% year over year.

MAA’s quarterly results were driven by an increase in the average effective rent per unit for the same-store portfolio. The average physical occupancy for the same-store portfolio also increased year over year.

The rental and other property revenues came in at $476.1 million, outpacing the Zacks Consensus Estimate of $474.2 million. The reported figure was 12% higher than the previous-year quarter’s $425 million.

AvalonBay Communities, Inc.’s AVB first-quarter 2022 core FFO per share of $2.26 matched the Zacks Consensus Estimate.

However, total revenues of $613.9 million lagged the consensus estimate of $615.4 million.

On a year-over-year basis, AVB’s core FFO per share increased 15.9% and total revenues grew 11.4%.

The first-quarter results reflected a year-over-year increase in same-store residential revenues, partially offset by rising operating expenses.

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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