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OUTFRONT Media (OUT) Q2 FFO Beats Estimates, Revenues Up Y/Y

·4 min read

OUTFRONT Media Inc. OUT reported second-quarter 2022 adjusted funds from operations (AFFO) per share of 57 cents, beating the Zacks Consensus Estimate of 45 cents. The figure more than doubled year over year.

Results reflect better-than-anticipated top-line growth driven by higher billboard revenues and transit and other revenues.

The quarterly revenues of $450.2 million outpaced the Zacks Consensus Estimate of $447.4 million. On a year-over-year basis, revenues increased 32%.

According to Jeremy Male, chairman and CEO of OUTFRONT Media, "Q2 was another strong quarter, with 32% revenue growth driving a 79% increase in Adjusted OIBDA. The majority of this growth was driven by billboard pricing as well as continued improvement in transit."

Quarter in Detail

During the reported quarter, billboard revenues were $354 million, marking year-over-year growth of 23.2%. 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 $96.2 million climbed 79.1% from the year-ago quarter. The upswing mainly resulted from the increase in yield compared with the prior-year period.

OUTFRONT Media’s operating income totaled $79.9 million in the second quarter, up from $29.1 million reported a year ago.

Operating expenses were $226.5 million, up 19.5% 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 six months ended Jun 30, 2022, was $101.1 million compared with $13.6 million recorded a year ago.

As of Jun 30, 2022, OUTFRONT Media’s liquidity position comprised unrestricted cash of $117.0 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 of its common stock under its at-the-market (ATM) equity program and had $232.5 million available under the ATM program at the quarter’s end.

Dividend Update

Concurrently, OUTFRONT Media announced its common stock quarterly cash dividend of 30 cents per share. The dividend will be paid out on Sep 30 to its shareholders on record as of Sep 2, 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

Simon Property Group, Inc.’s SPG second-quarter 2022 comparable FFO per share of $2.96 exceeded the Zacks Consensus Estimate of $2.91. The figure compares favorably with the year-ago quarter’s $2.92.

SPG’s quarterly results reflected healthy operating performance and growth in occupancy levels. The retail REIT behemoth also raised the 2022 FFO per share outlook based on the quarterly results. It also announced a hike in the quarterly dividend.

Boston Properties Inc.’s BXP second-quarter 2022 FFO per share of $1.94 beat the Zacks Consensus Estimate of $1.85. The figure also compared favorably with the year-ago quarter’s $1.72.

BXP’s quarterly results reflect growth in the bottom line. Also, it experienced strong leasing activity during the quarter.

Extra Space Storage Inc. EXR reported second-quarter 2022 core FFO per share of $2.13, beating the Zacks Consensus Estimate of $2.04. The figure also came in 29.9% higher than the prior-year quarter’s $1.64.

EXR’s results reflect better-than-anticipated top-line growth. Also, the same-store net operating income improved year over year.

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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