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Shares of American Tower Corporation (AMT - Free Report) have been trending upward in the pre-market session after it reported second-quarter 2023 adjusted funds from operations (AFFO) per share, attributable to AMT common stockholders, of $2.46, beating the Zacks Consensus Estimate of $2.36.
Results reflect better-than-anticipated revenues, aided by improving revenues across its Property segment. American Tower recorded healthy year-over-year organic tenant billings growth of 6.2% and total tenant billings growth of 7.2%. It also revised its 2023 outlook.
The company has clocked in total revenues of $2.77 billion, outpacing the Zacks Consensus Estimate of $2.73 billion.
On a year-over-year basis, while total revenues improved 3.6%, AFFO per share fell nearly 2% from the prior-year quarter’s tally.
Per Tom Bartlett, CEO, American Tower, “The momentum from the start of the year carried on into the second quarter, as our customers continued to invest in their networks to meet growing demand. We saw Consolidated Organic Tenant Billings Growth exceed 6% for the second consecutive quarter, solid leasing in our U.S. Data Center segment, and demonstrated a focus on cost controls, all supporting strong growth and attractive margin expansion.”
Quarter in Detail
Adjusted EBITDA was $1.75 billion, up 4.7% from the prior-year period. The adjusted EBITDA margin was 63.1% in the quarter.
In the reported quarter, AMT purchased 60 communications sites and other communications infrastructure assets, mainly in France and Spain, for $30 million.
In May, American Tower disposed of its subsidiary in Poland (“ATC Poland”) for €6.7 million or roughly $7.2 million at the date of closing. The transaction generated a gain on sale of $1.1 million.
Property Operations
Revenues were $2.73 billion, up 4.4% on a year-over-year basis. Our estimate for Property revenues was pegged at $2.66 billion. The operating profit was $1.78 billion, and the operating profit margin was 65%.
In the Property segment, revenues from the United States and Canada totaled $1.30 billion, up 5.4% year over year. Total international revenues amounted to $1.22 billion, rising 2.8%. Newly formed Data Centers added $205 million to Property revenues, up 7.3% from $191 million in the prior-year period.
Service Operations
Revenues totaled $43 million in the reported quarter, down from $60 million in the prior-year quarter. We expected the same to be $56.1 million. The operating profit was $21 million and the operating profit margin was 48% in the April-June quarter.
Cash Flow & Liquidity
In the second quarter, American Tower generated $1.21 billion of cash from operating activities, rising 32.1% year over year. Free cash flow in the period was $792 million, jumping 47.4%.
As of Jun 30, 2023, the company had $8.2 billion in total liquidity. This comprised $2 billion in cash and cash equivalents, and availability of $6.2 billion under its revolving credit facilities (net of any outstanding letters of credit).
Revised 2023 Guidance
American Tower anticipates total property revenues of $10,790-$10,970 million, suggesting a year-over-year improvement of 3.9% at the mid-point. The earlier guided range was $10,665-$10,845 million.
The adjusted EBITDA was revised upward to $6,950-$7,030 million from $6,860-$6,970 million stated earlier. This indicates a mid-point increase of 5.2%.
The AFFO attributable to AMT common stockholders is now projected in the band of $4,490-$4,570 million, implying marginal year-over-year growth at the mid-point. The company’s prior expectations ranged from $4,450 million to $4,560 million.
AFFO per share was revised upward to $9.61-$ 9.79, indicating a fall at the mid-point of 0.6%. The prior projected range was $9.53-$9.76. The Zacks Consensus Estimate for the same is pegged at $9.73, which lies within the company’s guided range.
The company retained its guidance for capital expenditure between $1,650 million and $1,760 million.
Prologis, Inc. (PLD - Free Report) reported second-quarter 2023 core FFO per share of $1.83, beating the Zacks Consensus Estimate of $1.68. The figure also compared favorably with the year-ago quarter’s figure of $1.11.
Results of this industrial REIT, which announced the acquisition of industrial properties from opportunistic real estate funds affiliated with Blackstone worth $3.1 billion in June, reflected robust leasing activity and solid rent growth. Prologis also raised the midpoint of its 2023 core FFO per share guidance.
Crown Castle Inc. (CCI - Free Report) reported second-quarter 2023 AFFO per share of $2.05, outpacing the Zacks Consensus Estimate of $1.99. The reported figure climbed 13.9% from the year-ago quarter’s tally of $1.80.
The results reflected better-than-anticipated revenues aided by robust site-rental revenue growth. However, CCI lowered its outlook for 2023, citing that it expects a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported second-quarter 2023 AFFO per share of $2.24, surpassing the Zacks Consensus Estimate of $2.20. The reported figure climbed 6.7% from the year-ago quarter’s tally.
ARE’s results reflected better-than-expected revenues on healthy leasing activity and solid rental rate growth.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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American Tower (AMT) Q2 AFFO & Revenues Top, '23 View Revised
Shares of American Tower Corporation (AMT - Free Report) have been trending upward in the pre-market session after it reported second-quarter 2023 adjusted funds from operations (AFFO) per share, attributable to AMT common stockholders, of $2.46, beating the Zacks Consensus Estimate of $2.36.
Results reflect better-than-anticipated revenues, aided by improving revenues across its Property segment. American Tower recorded healthy year-over-year organic tenant billings growth of 6.2% and total tenant billings growth of 7.2%. It also revised its 2023 outlook.
The company has clocked in total revenues of $2.77 billion, outpacing the Zacks Consensus Estimate of $2.73 billion.
On a year-over-year basis, while total revenues improved 3.6%, AFFO per share fell nearly 2% from the prior-year quarter’s tally.
Per Tom Bartlett, CEO, American Tower, “The momentum from the start of the year carried on into the second quarter, as our customers continued to invest in their networks to meet growing demand. We saw Consolidated Organic Tenant Billings Growth exceed 6% for the second consecutive quarter, solid leasing in our U.S. Data Center segment, and demonstrated a focus on cost controls, all supporting strong growth and attractive margin expansion.”
Quarter in Detail
Adjusted EBITDA was $1.75 billion, up 4.7% from the prior-year period. The adjusted EBITDA margin was 63.1% in the quarter.
In the reported quarter, AMT purchased 60 communications sites and other communications infrastructure assets, mainly in France and Spain, for $30 million.
In May, American Tower disposed of its subsidiary in Poland (“ATC Poland”) for €6.7 million or roughly $7.2 million at the date of closing. The transaction generated a gain on sale of $1.1 million.
Property Operations
Revenues were $2.73 billion, up 4.4% on a year-over-year basis. Our estimate for Property revenues was pegged at $2.66 billion. The operating profit was $1.78 billion, and the operating profit margin was 65%.
In the Property segment, revenues from the United States and Canada totaled $1.30 billion, up 5.4% year over year. Total international revenues amounted to $1.22 billion, rising 2.8%. Newly formed Data Centers added $205 million to Property revenues, up 7.3% from $191 million in the prior-year period.
Service Operations
Revenues totaled $43 million in the reported quarter, down from $60 million in the prior-year quarter. We expected the same to be $56.1 million. The operating profit was $21 million and the operating profit margin was 48% in the April-June quarter.
Cash Flow & Liquidity
In the second quarter, American Tower generated $1.21 billion of cash from operating activities, rising 32.1% year over year. Free cash flow in the period was $792 million, jumping 47.4%.
As of Jun 30, 2023, the company had $8.2 billion in total liquidity. This comprised $2 billion in cash and cash equivalents, and availability of $6.2 billion under its revolving credit facilities (net of any outstanding letters of credit).
Revised 2023 Guidance
American Tower anticipates total property revenues of $10,790-$10,970 million, suggesting a year-over-year improvement of 3.9% at the mid-point. The earlier guided range was $10,665-$10,845 million.
The adjusted EBITDA was revised upward to $6,950-$7,030 million from $6,860-$6,970 million stated earlier. This indicates a mid-point increase of 5.2%.
The AFFO attributable to AMT common stockholders is now projected in the band of $4,490-$4,570 million, implying marginal year-over-year growth at the mid-point. The company’s prior expectations ranged from $4,450 million to $4,560 million.
AFFO per share was revised upward to $9.61-$ 9.79, indicating a fall at the mid-point of 0.6%. The prior projected range was $9.53-$9.76. The Zacks Consensus Estimate for the same is pegged at $9.73, which lies within the company’s guided range.
The company retained its guidance for capital expenditure between $1,650 million and $1,760 million.
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 Other REITs
Prologis, Inc. (PLD - Free Report) reported second-quarter 2023 core FFO per share of $1.83, beating the Zacks Consensus Estimate of $1.68. The figure also compared favorably with the year-ago quarter’s figure of $1.11.
Results of this industrial REIT, which announced the acquisition of industrial properties from opportunistic real estate funds affiliated with Blackstone worth $3.1 billion in June, reflected robust leasing activity and solid rent growth. Prologis also raised the midpoint of its 2023 core FFO per share guidance.
Crown Castle Inc. (CCI - Free Report) reported second-quarter 2023 AFFO per share of $2.05, outpacing the Zacks Consensus Estimate of $1.99. The reported figure climbed 13.9% from the year-ago quarter’s tally of $1.80.
The results reflected better-than-anticipated revenues aided by robust site-rental revenue growth. However, CCI lowered its outlook for 2023, citing that it expects a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported second-quarter 2023 AFFO per share of $2.24, surpassing the Zacks Consensus Estimate of $2.20. The reported figure climbed 6.7% from the year-ago quarter’s tally.
ARE’s results reflected better-than-expected revenues on healthy leasing activity and solid rental rate growth.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.