American Tower (AMT) Q2 AFFO and Revenues Beat Estimates
American Tower Corporation AMT reported second-quarter 2022 consolidated adjusted funds from operations (AFFO) per share of $2.59 per share, which surpassed the Zacks Consensus Estimate of $2.35. The bottom line improved 7% year over year.
The company generated total revenues of $2.67 billion, beating the consensus mark of $2.65 billion. Also, the top line jumped 16.3% year over year.
Results reflect improving revenues across its Property segment. American Tower also recorded decent year-over-year organic tenant billings growth of 2.6% and total tenant billings growth of 7.8%.
Quarter in Detail
Adjusted EBITDA came in at $1.67 billion, up 13.2% from the prior-year period. The adjusted EBITDA margin was 62.5% in the quarter.
During the reported quarter, AMT spent roughly $90 million on the acquisition of 118 communications sites and other communications infrastructure assets, including 96 communications sites relating to its prior-announced agreement with Orange S.A., as well as fiber connected to its communications sites in Spain from Telefónica de España S.A.U.
Property Operations
Revenues came in at $2.6 billion, up 17.1% on a year-over-year basis. The operating profit was $1.69 billion, and the operating profit margin came in at 65%.
In the Property segment, revenues from the United States totaled $1.24 billion, up 0.4% year over year. Total international revenues amounted to $1.19 billion, jumping 18.8%. Further, newly formed Data Centers added $191 million to Property revenues, up substantially from $3 million in the prior-year period.
Service Operations
Revenues totaled $60 million during the reported quarter, down from $66 million in the prior-year quarter. The operating profit came in at $26 million and the operating profit margin was 43% in the June-end quarter.
Cash Flow & Liquidity
In the second quarter, American Tower generated $915 million of cash from operating activities, down 3.8% year over year. Free cash flow in the period was $538 million, plunging 19.3%.
At the end of the second quarter, the company had $5.4 billion in total liquidity. This comprised $2.1 billion in cash and cash equivalents and availability of $3.4 billion under its revolving credit facilities (net of any outstanding letters of credit).
2022 Guidance
American Tower now anticipates total property revenues in the range of $10,280-$10,460 million, suggesting a year-over-year improvement of 13.8% at the midpoint. Earlier, the company targeted total property revenues in the band of $10,295-$10,475 million.
Now, adjusted EBITDA is projected in the band of $6,535-$6,645 million, indicating a midpoint increase of 10.1%. The prior guidance was in the band of $6,555-$6,665 million.
Consolidated AFFO is expected between $4,625 and $4,735 million, implying a year-over-year midpoint expansion of 7.0%. The same was earlier expected in the band of $4,705-$4,815 million.
Further, AFFO for common stockholders is now anticipated in the band of $4,455-$4,565 million, suggesting midpoint growth of 5.5%. Previously, AMT expected the same in the $4,545-$4,655 million range.
AFFO per share is expected in the range of $9.62-$9.86, indicating an increase of 3.3% year over year. The Zacks Consensus Estimate for the same is currently pegged at $9.92.
Capital expenditure is projected between $1.94 and $2.04 billion.
Currently, AMT carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Tower Corporation Price, Consensus and EPS Surprise
American Tower Corporation price-consensus-eps-surprise-chart | American Tower Corporation Quote
Performance of an REIT
Crown Castle International Corp. CCI reported second-quarter 2022 AFFO per share of $1.80. The Zacks Consensus Estimate for the same was pegged at $1.79. Also, net revenues of $1.73 billion exceeded the Zacks Consensus Estimate of $1.71 billion. Growth in site-rental revenues due to elevated tower space demand aided Crown Castle International’s top line.
Upcoming Release
We now look forward to the earnings release of an REIT — SBA Communications Corporation SBAC — which is scheduled to report second-quarter 2022 results on Aug 1 after market close. The results of SBA Communications Corporation are expected to reflect year-over-year growth in quarterly revenues and FFO per share.
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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