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OUTFRONT Media (OUT) Reports Adjusted FFO Deficit in Q2

Zacks Equity Research

OUTFRONT Media’s OUT second-quarter 2020 adjusted funds from operations (FFO) share was a deficit of 15 cents. The Zacks Consensus Estimate for the same was a deficit of 17 cents. In the prior-year quarter, the company had reported adjusted FFO per share of 67 cents.

Revenues came in at $232.9 million for the second quarter, missing the Zacks Consensus Estimate of $239.8 million. The revenue figure also plummeted 49.4% year over year.

Results highlight lower average revenue per display, as well as softer revenues from digital-billboard conversions and digital transit displays. Moreover, the adjusted operating income before depreciation and amortization (adjusted OIBDA) declined year over year. However, transit franchise cost and billboard lease expenses witnessed declines.

The company has scrapped its dividend payment for the second quarter in light of the pandemic related uncertainties.

Quarter in Detail

Billboard revenues came in at $188.5 million, indicating a year-over-year plunge of 38.4%. This downside resulted from lower average revenue per display, referred as yield, and declining revenues from digital-billboard conversions.

Transit and other revenues of $44.4 million slumped 71.2%, year on year. Fall in yield and resulted in this decline.

Additionally, the company reported an operating loss of $25.9 million in the second quarter, as against the operating income of $88.7 million registered in the prior year quarter.

Operating expenses of $154 million plunged 35.9% year over year. This mainly resulted from lower transit franchise expense, decreased posting, maintenance and other expenses, and a drop in billboard property lease expense.

Balance Sheet

Net cash flow, resulting from operating activities for the quarter ended Jun 30, 2020, came in at $50.7 million, plummeting 39.3% year on year. This primarily reflects the negative impact of decrease in net income.

As of Jun 30, 2020, Outfront Media had a solid liquidity position, which comprised unrestricted cash of $647.8 million and $498.4 million of availability under its $500-million revolving credit facility, net of $1.6 million of issued letters of credit. The company has $232.5 million under its at-the-market (ATM) equity program.

Currently, OUTFRONT Media carries a Zacks Rank #4 (Sell).

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

PS Business Parks, Inc. PSB reported second-quarter 2020 core FFO per share of $1.59, missing the Zacks Consensus Estimate of $1.66. Moreover, the reported figure decreased 9.5% year over year.

Extra Space Storage, Inc. EXR delivered second-quarter core FFO per share of $1.24. The figure came in 6.9% higher than the prior-year quarter’s $1.16. The Zacks Consensus Estimate for the same was $1.16.

Mack-Cali Realty Corp’s CLI second-quarter 2020 core FFO per share of 28 cents missed the Zacks Consensus Estimate of 31 cents. The reported figure also compared unfavorably with the year-ago quarter’s reported number of 40 cents.

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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