Back to top

Image: Bigstock

Lamar Advertising (LAMR) Q2 FFO & Revenues Top, Stock Down

Read MoreHide Full Article

Lamar Advertising Co. (LAMR - Free Report) reported second-quarter 2017 adjusted funds from operations (FFO) of $1.39 per share, comfortably surpassing the Zacks Consensus Estimate of $1.31. Also, the figure came in higher than the year-ago tally of $1.37.
Net revenue for the quarter increased 2.5% year over year to $397.1 million. In addition, the top-line figure surpassed the Zacks Consensus Estimate of $396.51 million.

Results reflected year-over-year rise in operating income, adjusted EBITDA and cash flow from operating activities.

However, management predicts “a sluggish ad environment for the rest of the year”. Consequently, the company reduced its full-year 2017 adjusted FFO per share outlook.

Shares of Lamar fell nearly 4.4% to $68.53 during regular trading session on Aug 7.
 

Lamar Advertising Company Price, Consensus and EPS Surprise

 

Lamar Advertising Company Price, Consensus and EPS Surprise | Lamar Advertising Company Quote

Note: The EPS numbers presented in the above chart represent funds from operations (“FFO”) per share.

Quarter in Detail

Operating income increased to $128.2 million from $117.1 million recorded in the prior-year period. Adjusted earnings before interest, taxes, depreciation and amortization rose 3.1% year over year to $181.9 million. In addition, free cash flow was up 6.3% year over year to $119.2 million.

At the quarter end, Lamar had total liquidity of $452.8 million, of which $409.9 million was available under its revolving senior credit facility, and $42.9 million in cash and cash equivalents.

Revised Outlook

Lamar revised its 2017 adjusted FFO per share guidance range to $4.90–$5 from the previous range of $5.05–$5.20. The Zacks Consensus Estimate for 2017 is currently pegged at $4.83.

Our Take

The expectation of an unfavorable advertisement environment remains a concern. Moreover, elevated expenses associated with the acquisition of outdoor advertising assets, competition from outdoor advertisers and other forms of media, and any rise in interest rates pose challenges.

Nevertheless, Lamar’s diversified tenant base, impressive national footprint, opportunistic acquisitions and healthy balance sheet are anticipated to cushion the company during times of downturn.

Lamar currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

CBRE Group Inc. reported second-quarter 2017 adjusted earnings per share of 65 cents, beating the Zacks Consensus Estimate of 53 cents. The figure also marked a 25% increase from the prior-year quarter tally of 52 cents. The company posted revenues of around $3.34 billion, missing the Zacks Consensus Estimate of $3.36 billion. However, revenues were higher than the year-ago figure of around $3.21 billion. Moreover, fee revenues were up 3% (6% in local currency) year over year to $2.2 billion.

Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported second-quarter 2017 adjusted funds from operations (FFO) of $1.50 per share. The figure came in line with the Zacks Consensus Estimate. This compares favorably with the prior-year quarter tally of $1.36. Total revenue for the quarter jumped 20.8% year over year to $273 million. In addition, the figure handily surpassed the Zacks Consensus Estimate of $253 million.

PS Business Parks, Inc. reported second-quarter 2017 adjusted FFO of $1.55 per share, surpassing the Zacks Consensus Estimate of $1.52. Moreover, the figure came in 14% higher than $1.36 recorded in the prior-year quarter. The rise stemmed from higher NOI, reduced interest expenses and savings from lower preferred distributions.

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

"More Stock News: Tech Opportunity Worth $386 Billion in 2017"

From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future. 
                                                                                                                                                                                                                                                                                                                                                     
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity.  Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Lamar Advertising Company (LAMR) - free report >>

Alexandria Real Estate Equities, Inc. (ARE) - free report >>

Published in