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What's in Store for American Tower (AMT) in Q1 Earnings?
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American Tower Corp. (AMT - Free Report) is scheduled to release first-quarter 2018 results, before the opening bell on May 1. Revenues and funds from operations (FFO) per share are expected to witness a rise year over year.
The company’s bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 0.97%.
Let’s see how things are shaping up prior to this announcement.
American Tower Corporation (REIT) Price and EPS Surprise
American Tower faces fierce competition in the global wireless tower market from large incumbents like Crown Castle International Corp. (CCI - Free Report) and SBA Communications Corp. (SBAC - Free Report) .
The company has a substantially leveraged balance sheet. At the end of fourth-quarter 2017, the company had $802.1 million in cash and cash equivalents, and around $19,430.3 million of outstanding long-term debt, compared with $787.2 million and $18,294.7 million, respectively, at the end of December 2016. Such high debt levels may impede sufficient cash flow generation which is needed to meet future debt obligations. Moreover, this may keep the company from accessing the debt market and refinancing at suitable rates.
Customer concentration is very high for American Tower and the top four customers account for nearly 65% of its quarterly revenues. Further, American Tower is rapidly expanding in the international markets, especially in the emerging Asian and Latin American markets. Although this geographic diversification will boost revenues, it might jeopardize the bottom line. Tower operations in the emerging markets are not as profitable as that in the mature U.S. market.
Further, American Tower’s activities during the quarter could not gain adequate analyst confidence. Consequently, the Zacks Consensus Estimate for FFO per share of $1.76 for the first quarter remained unchanged over the past month. However, the figure witnessed rise of 11.4% from the prior-year quarter.
Meanwhile, the company generates most of its revenues from long-term (typically 5-10 year) tower leases with major wireless carriers. Additionally, it provides on-site maintenance and servicing of antennas, amplifiers and base-station equipment. Since moving equipment from one tower to another is cumbersome, carriers normally renew these contracts upon expiration. This generates a strong long-term lease upcycle.
Revenues generated from the leasing and management of such networks are remarkable and more than 95% are recurring in nature. Moreover, most of its towers are over 210 feet tall, consequently providing sufficient space for the company's customers to install transmission equipment. The company also owns 29% of the land under its towers in the United States.
Also, the Zacks Consensus Estimate for first-quarter revenues is pegged at $1.74 billion, indicating a year-over-year improvement of 7.5%.
Earnings Whispers
Our proven model does not conclusively show that American Tower is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. Unfortunately, that is not the case here as elaborated below.
You can uncover the best stocks to buy or sell before they’re reported with the Earnings ESP Filter.
Zacks ESP: The company has an Earnings ESP of +1.14%, representing the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
Zacks Rank: American Tower has a Zacks Rank #4 (Sell).
Key Pick
Simon Property Group, Inc. (SPG - Free Report) has the right combination of elements to deliver a positive surprise with respect to FFO per share when it reports first-quarter 2018 results on Apr 27. It has an Earnings ESP of +0.32% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
What's in Store for American Tower (AMT) in Q1 Earnings?
American Tower Corp. (AMT - Free Report) is scheduled to release first-quarter 2018 results, before the opening bell on May 1. Revenues and funds from operations (FFO) per share are expected to witness a rise year over year.
The company’s bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 0.97%.
Let’s see how things are shaping up prior to this announcement.
American Tower Corporation (REIT) Price and EPS Surprise
American Tower Corporation (REIT) Price and EPS Surprise | American Tower Corporation (REIT) Quote
Factors at Play
American Tower faces fierce competition in the global wireless tower market from large incumbents like Crown Castle International Corp. (CCI - Free Report) and SBA Communications Corp. (SBAC - Free Report) .
The company has a substantially leveraged balance sheet. At the end of fourth-quarter 2017, the company had $802.1 million in cash and cash equivalents, and around $19,430.3 million of outstanding long-term debt, compared with $787.2 million and $18,294.7 million, respectively, at the end of December 2016. Such high debt levels may impede sufficient cash flow generation which is needed to meet future debt obligations. Moreover, this may keep the company from accessing the debt market and refinancing at suitable rates.
Customer concentration is very high for American Tower and the top four customers account for nearly 65% of its quarterly revenues. Further, American Tower is rapidly expanding in the international markets, especially in the emerging Asian and Latin American markets. Although this geographic diversification will boost revenues, it might jeopardize the bottom line. Tower operations in the emerging markets are not as profitable as that in the mature U.S. market.
Further, American Tower’s activities during the quarter could not gain adequate analyst confidence. Consequently, the Zacks Consensus Estimate for FFO per share of $1.76 for the first quarter remained unchanged over the past month. However, the figure witnessed rise of 11.4% from the prior-year quarter.
Meanwhile, the company generates most of its revenues from long-term (typically 5-10 year) tower leases with major wireless carriers. Additionally, it provides on-site maintenance and servicing of antennas, amplifiers and base-station equipment. Since moving equipment from one tower to another is cumbersome, carriers normally renew these contracts upon expiration. This generates a strong long-term lease upcycle.
Revenues generated from the leasing and management of such networks are remarkable and more than 95% are recurring in nature. Moreover, most of its towers are over 210 feet tall, consequently providing sufficient space for the company's customers to install transmission equipment. The company also owns 29% of the land under its towers in the United States.
Also, the Zacks Consensus Estimate for first-quarter revenues is pegged at $1.74 billion, indicating a year-over-year improvement of 7.5%.
Earnings Whispers
Our proven model does not conclusively show that American Tower is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. Unfortunately, that is not the case here as elaborated below.
You can uncover the best stocks to buy or sell before they’re reported with the Earnings ESP Filter.
Zacks ESP: The company has an Earnings ESP of +1.14%, representing the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
Zacks Rank: American Tower has a Zacks Rank #4 (Sell).
Key Pick
Simon Property Group, Inc. (SPG - Free Report) has the right combination of elements to deliver a positive surprise with respect to FFO per share when it reports first-quarter 2018 results on Apr 27. It has an Earnings ESP of +0.32% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>