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American Tower Corp.’s (AMT - Analyst Report) second-quarter 2013 net income of $99.8 million or 25 cents per share more than doubled from $48.2 million or 12 cents per share in the prior-year quarter. However, it missed the Zacks Consensus Estimate of 53 cents. Total revenue of $808.8 million increased 15.9% year over year, but were below the Zacks Consensus Estimate of $817 million.

Adjusted EBITDA in the reported quarter was $524 million, representing an annualized growth of 12.5%. Adjusted EBITDA margin was 65% compared with 67% in the prior-year quarter. Gross margin was 75.1% compared with 75.9% in the year-ago quarter. Selling, general & administrative expenses were $99.8 million compared with $76.8 million in the year-ago quarter. Operating income was $312.8 million, up 15.6% year over year. In the reported quarter, American Tower repurchased 0.8 million shares of its Class A common stock for a total consideration of $62.1 million.

In the second quarter of 2013, American Tower generated $390.5 million in cash from operations, up 8.2% year over year. Adjusted funds from operations (AFFO) in the reported quarter were $366.2 million, up 19.5% from the year-ago quarter. AFFO per share was 92 cents compared with 77 cents in the prior-year quarter.

At the end of second quarter 2013, American Tower had $462.7 million in cash and marketable securities and around $8,798.6 million in outstanding debt on its balance sheet compared with $374.6 million and $8,693.3 million at the end of 2012, respectively. At the end of second quarter 2013, debt-to-capitalization ratio was 0.71 as compared with 0.70 at the end of 2012.

Domestic Rental and Management Segment

Quarterly revenues were $521 million, up 10.1% year over year. Gross margin came in at 81.7% compared with 81.4% in the year-ago quarter. Operating margin was 77%, flat with the year-ago quarter.

International Rental and Management Segment

Quarterly revenues stood at $268.2 million, signifying a 28.4% year-over-year increase. Gross margin for the segment was 63% compared with 65% in the year-ago quarter. Operating margin was 51% compared with 56% in the year-ago quarter.

Network Development Services Segment

Quarterly revenues were $19.6 million, up by 26.5% year over year. Gross margin was 62.8% compared with 54.2% in the year-ago quarter. Operating margin was 51% compared with 42% in the year-ago quarter.

Tower Count

At the end of the second quarter of 2013, American Tower managed 56,193 communications towers, of which 55,720 were for Wireless network and 473 for Broadcasting. Geographically, the company operates 22,720 wireless towers and 274 broadcast towers in the U.S. along with 33,473 wireless towers and 199 broadcast towers outside the U.S.

Financial Outlook

For 2013, total revenue from the Rental & Management segment is likely to be $3,160 million to $3,210 million. Adjusted EBITDA is anticipated in the band of $2,085 to $2,135 million. AFFO is estimated at around $1,430 -$1,480 million. Net income is estimated around $655 -$695 million. Capital expenditure is expected in the band of $525 -$625 million.

Other Stocks to Consider

American Tower currently has a Zacks Rank #3 (Hold). Other stocks in the wireless tower industry include Crown Castle International Corp. (CCI - Analyst Report), SBA Communication Corp. (SBAC - Snapshot Report) and Equinix Inc. (EQIX - Analyst Report).  

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