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Outfront Media's (OUT) Q1 Earnings Beat, Revenues Improve

Outfront Media Inc. OUT reported first-quarter 2016 adjusted funds from operations (“FFO”) per share of 36 cents, beating the Zacks Consensus Estimate of 33 cents. First-quarter 2015 adjusted FFO had been 36 cents too.

Revenues for the quarter increased 1.3% year over year to $348.4 million, outpacing the Zacks Consensus Estimate of $344.4 million.

Quarter in Detail

Operating income during the reported quarter was $24.2 million, down from $26.6 million recorded in the prior-year quarter. The company’s total expenses grew 2.2% year over year to $324.2 million.

Adjusted operating income before depreciation and amortization rose 1.3% year over year to $88.1 million. Net cash flow resulting from operating activities came in at $33.8 million as of Mar 31, 2016, significantly higher than $5.8 million as of Mar 31, 2015.

At the quarter end, Outfront’s liquidity included $358.8 million available under its revolving credit facility and $43.2 million in cash and cash equivalents.

Segmental Performance

During the quarter, revenues at the U.S. segment came in at $322.9 million, up 2.9% year over year.

Revenues at the international segment were $25.5 million, down 15%.

Excluding stock-based compensation, restructuring charges and acquisition costs, corporate costs during the quarter were $9 million, up by $1.5 million from the prior-year quarter.

Our Take

Outfront’s competent products and consistent investments in products, data, and technology bode well for the long term. However, rising expenses pose concerns.

Outfront currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the REIT space include Brookfield Canada Office Properties BOXC, Gaming and Leisure Properties, Inc GLPI and Whitestone REIT WSR. All these stocks sport a Zacks Rank #1 (Strong Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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BROOKFLD CDA OP (BOXC): Free Stock Analysis Report
 
WHITESTONE REIT (WSR): Free Stock Analysis Report
 
OUTFRONT MEDIA (OUT): Free Stock Analysis Report
 
GAMING AND LEIS (GLPI): Free Stock Analysis Report
 
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