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American Tower (AMT) Beats on Q1 Earnings & Revenues

American Tower Corp. AMT reported strong financial numbers for the first quarter of 2016, with both the top and bottom line outpacing the respective Zacks Consensus Estimate.

Adjusted Funds from Operations (AFFO) of $602.5 million or $1.41 per share in the quarter improved from the year-ago quarter figure of $513.6 million or $1.25 per share. Moreover, the bottom line surpassed the Zacks Consensus Estimate of $1.25.

Total revenue of $1,289 million increased 19.5% year over year and beat the Zacks Consensus Estimate of $1,287 million.

Adjusted EBITDA in the reported quarter was $833 million, up 15.1%. Adjusted EBITDA margin was 65%, down 2% from the first-quarter 2015 figure. Selling, general & administrative expenses totaled $135.3 million, compared with $123.3 million in the year-earlier quarter. Operating income was $451.9 million, up 7.6%.

At the end of the first quarter, the company had $336.4 million in cash and cash equivalents, and around $16,884.2 million of outstanding long-term debt, compared with the 2015-end levels of $320.7 million and $17,068.8 million, respectively. Meanwhile, the debt-to-capitalization ratio stood at 0.70 versus 0.72 at the end of 2015.

Property Segment

Quarterly revenues grossed $1,267.65 million, up 19.3%. Segment gross profit margin came in at 73.3% versus 75.9% in the year-ago quarter. Operating profit margin stood at 67% compared with 70% in the prior-year quarter.

Within the Property segment, revenues from the U.S. totaled $852 million, up 18.7%. Meanwhile, total international revenues came in at $416 million, up 20.9%. Within this, revenues from Asia came in at $63 million, up 10.5%, while EMEA revenues grossed $130 million, up roughly 71% year over year. Latin America revenues totaled $223 million, up 5.7%.

Services Segment

Quarterly revenues totaled $21.4 million, reflecting a jump of 25.8%. Gross profit margin was 42.8% compared with 29.4% in the year-ago quarter. Operating margin was 44% versus 49% in the prior-year quarter.

Financial Outlook

For 2016, total revenue from the Property segment is projected in the range of $5,585–$5,715 million. Adjusted EBITDA is anticipated in the band of $3,460–$3,550 million. AFFO is estimated to be around $2,380–$2,470 million. Meanwhile, net income is predicted to be $1,010–$1,120 million, while capital expenditure should be in the $700–$800 million range.

Zacks Rank & Key Picks

AmericanTowercurrently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include CoreSite Realty Corporation COR, Communications Sales & Leasing, Inc. CSAL and LTC Properties Inc. LTC. All three stocks carry a Zacks Rank #2 (Buy).

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AMER TOWER CORP (AMT): Free Stock Analysis Report
 
LTC PROPERTIES (LTC): Free Stock Analysis Report
 
CORESITE REALTY (COR): Free Stock Analysis Report
 
COMMUNICTNS S&L (CSAL): Free Stock Analysis Report
 
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