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OUTFRONT Media (OUT) Q3 FFO Beats, Revenues Miss Estimates

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OUTFRONT Media Inc. (OUT - Free Report) delivered third-quarter 2020 adjusted funds from operations (FFO) per share of 19 cents, outpacing the Zacks Consensus Estimate of 12 cents. In the prior-year quarter, the company had reported adjusted FFO per share of 64 cents.

Revenues came in at $282.3 million for the third quarter, missing the Zacks Consensus Estimate of $284.7 million. The revenue figure also plunged 39% year over year.

The company’s third-quarter results reflect a decline in operating expenses and selling, general and administrative expenses. However, a decline in revenues on dwindling demand for its services is a concern.

In the reported quarter, the company sold its sports marketing business.

Quarter in Detail

Billboard revenues came in at $239.9 million, indicating a year-over-year fall of 23.1%. This downside resulted from lower average revenue per display, referred to as yield. Transit and other revenues of $42.4 million slumped 71.8%, year on year. The decline was mainly due to the fall in yield, sale of the company’s sports marketing business and a drop in third-party digital equipment sales.

OUTFRONT Media reported an operating income of $25.1 million in the third quarter, tanking 70.6% from the prior-year quarter.

Operating expenses of $155.8 million plunged 36.5% 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 third quarter ended Sep 30, 2020, came in at $86 million, plummeting 46.9% year on year. This primarily reflects the negative impact of a decrease in net income.

As of Sep 30, 2020, OUTFRONT Media had a solid liquidity position, which comprised unrestricted cash of $690.6 million and $498.4 million of availability under its $500-million revolving credit facility, net of $1.6 million of issued letters of credit. During the third quarter, the company sold no shares under its at-the-market (ATM) equity program and had $232.5 million available under its ATM program at quarter end.

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

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.

Performance of Other REITS

Boston Properties Inc.’s (BXP - Free Report) third-quarter 2020 FFO per share of $1.57 missed the Zacks Consensus Estimate of $1.64. The reported figure also decreased 4.3% from the year-ago quarter’s $1.64.

SITE Centers Corp.’s (SITC - Free Report) third-quarter operating FFO per share of 23 cents came in line with the Zacks Consensus Estimate. The reported figure, however, declined 23.3% year over year.

Highwoods Properties, Inc. (HIW - Free Report) third-quarter 2020 FFO per share of 86 cents missed the Zacks Consensus Estimate of 88 cents. The figure included 5 cents from debt extinguishment charges and non-cash straight-line credit losses. Nonetheless, the reported figure improved 3.6% from the 83 cents reported in the year-ago period.

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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