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American Tower Corp. (AMT - Analyst Report) reported mixed fourth-quarter 2013 results where the bottom line missed the Zacks Consensus Estimate but the top line outpaced the same. Moreover, the company raised its guidance for fiscal 2014 based on robust 4GLTE deployment.

In the reported quarter, American Tower reported net income of $100 million or 25 cents per share against $135.7 million or 34 cents per share in the prior year quarter. The figure also missed the Zacks Consensus Estimate of 47 cents per share. Total revenue of $942 million increased 22.6% year over year and was also above the Zacks Consensus Estimate of $917 million.

Adjusted EBITDA in the reported quarter was $600.1 million, up 19.9% year over year. Adjusted EBITDA margin was 64% against 65% in the prior-year quarter figure. Gross margin was 73.3% against 74.7% in the year-ago quarter. Selling, general & administrative expenses were $116.8 million compared with $89.4 million in the year-ago quarter.

Operating income was $292.9 million, up 4.9% year over year. In the reported quarter, Adjusted Funds From Operations (AFFO) grew 28.1% year over year to $378.2 million or 95 cents per share.

At the end of 2013, American Tower generated $1,599 million in cash from operations, against $1,414.4 million in 2012. At the end of fourth-quarter 2013, the company had $312.2 million in cash and marketable securities and around $14,408.1 million in outstanding debt on its balance sheet compared with $374.6 million and $8,693.3 million at the end of 2012, respectively. The debt-to-capitalization ratio was 0.80 against 0.70 at the end of 2012.

Domestic Rental and Management Segment

Quarterly revenues were $622.7 million, up 24.6% year over year. Gross margin came in at 80.2% compared with 83.1% in the year-ago quarter. Operating margin was 75% versus 78% in the prior-year quarter.

International Rental and Management Segment

Quarterly revenues stood at $301.2 million, signifying a 25.6% year-over-year increase. Gross margin for the segment was 64% compared with 61.5% in the year-ago quarter. Operating margin was 54% against 50% in the year-earlier quarter.

Network Development Services Segment

Quarterly revenues were $18.1 million, down by 36.9% year over year. Gross margin was 54.7% compared with 53.3% in the year-ago quarter. Operating margin was 43% versus 45% in the year-ago quarter.

Tower Count

At the end of the fourth quarter of 2013, American Tower managed 67,069 communications towers. Geographically, the company operates 27,739 wireless towers in the U.S. and 39,330 wireless towers outside the U.S.

Financial Outlook

For 2014, total revenue from the Rental & Management segment is likely to be in the range of $3,820–$3,910 million. Adjusted EBITDA is anticipated in the band of $2,500–$2,560 million. AFFO is estimated at around $1,680–$1,740 million. Net income is estimated in the range of $765–$805 million. Capital expenditure is projected in the $850–$950 million range.

Other Stocks to Consider

American Tower currently has a Zacks Rank #3 (Hold). American Tower currently has a Zacks Rank #3 (Hold). Better-performing stocks in the related industries are Crown Castle International Corp. (CCI - Analyst Report), Sabra Health Care REIT, Inc. (SBRA - Snapshot Report) and Winthrop Realty Trust (FUR - Snapshot Report).  All three have a Zacks Rank #1 (Strong Buy).

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