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OUTFRONT Media (OUT) Q4 FFO & Revenues Beat Estimates

Moumita C. Chattopadhyay
·4 min read

OUTFRONT Media Inc. OUT delivered fourth-quarter 2020 adjusted funds from operations (“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.

Revenues came in at $335.8 million for the fourth quarter, beating the Zacks Consensus Estimate of $318 million. However, the revenue figure plunged 31.2% year over year.

The company’s fourth-quarter results reflect 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.

Jeremy Male, chairman and chief executive officer of OUTFRONT Media, noted that "Digital billboards returned to growth, helping drive total revenues above our expectations, with good flow-through to cash flow."

For full-year 2020, the company reported adjusted FFO of $96.3 million, down from $334.1 million a year ago. Revenues declined to $1.24 billion from $1.78 billion reported in the prior year.

Quarter in Detail

Billboard revenues came in at $279.3 million, indicating a year-over-year fall of 13%. This downside resulted from lower average revenues per display (referred to as yield) due to the pandemic’s impact on customer advertising expenditures and overall demand for the company’s services.

Transit and other revenues of $56.5 million slumped 66.2%, year on year. The decline was mainly due to the fall in yield because of the pandemic’s impact on customer advertising expenditures and overall demand for the company’s services, and sale of the company’s sports marketing operating segment.

OUTFRONT Media reported an operating income of $39.5 million in the fourth quarter, tanking 59.7% from the prior-year quarter.

Operating expenses of $176.2 million plunged 31.1% year over year. This mainly resulted from lower transit franchise expenses, decreased posting, maintenance and other expenses, and a drop in billboard property lease expenses.

Balance Sheet

Net cash flow, resulting from operating activities for the year ended Dec 31, 2020, came in at $130.6 million, plummeting 52.8% year on year. This primarily reflects the negative impact of a decrease in net income.

As of Dec 31, 2020, OUTFRONT Media had a solid liquidity position, which comprised of unrestricted cash of $710.4 million and $498.4 million of availability under its $500-million revolving credit facility, net of $1.6 million of issued letters of credit. During the fourth quarter, the company sold no share under its at-the-market (“ATM”) equity program and had $232.5 million available under its ATM program at quarter end.

Currently, OUTFRONT Media carries 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

Extra Space Storage, Inc. EXR reported fourth-quarter 2020 core FFO per share of $1.48, beating the Zacks Consensus Estimate of $1.35. The figure came in 16.5% higher than the prior-year quarter’s $1.27. Results reflect strong average occupancy and higher average rates to existing customers for the quarter, partially offset by lower late fees. The company also experienced reductions in most expense categories, partly muted by rise in property taxes.

Public Storage's PSA fourth-quarter 2020 core FFO per share of $2.93 surpassed the Zacks Consensus Estimate of $2.85. The figure also increased 3.2% year one year from $2.84. Results reflect an improvement in occupancy in the reported quarter. The company also benefited from its expansion efforts through acquisitions, development and extensions. In addition, it witnessed a decrease in on-site property manager payroll. However, the company was adversely impacted by lower realized annual rent per occupied square foot.

PS Business Parks, Inc. PSB reported fourth-quarter 2020 core FFO per share of $1.66, surpassing the Zacks Consensus Estimate of $1.64. Moreover, the reported figure increased from $1.65 reported in the year-ago quarter. Results highlight 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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