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Why Is OUTFRONT Media (OUT) Up 3.9% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for OUTFRONT Media Inc. (OUT - Free Report) . Shares have added about 3.9% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is OUT due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Outfront Media Q1 FFO Lags Estimates, Revenues Beat

Outfront Media reported first-quarter 2018 adjusted FFO per share of 27 cents, missing the Zacks Consensus Estimate by a penny. Further, the figure came in lower than the year-ago quarter tally of 28 cents.

Results reflected weakness in the national advertising market. Further, operating expenses rose on a year-over-year basis. However, these were partially offset by higher billboard and transit revenues.

Revenues in the reported quarter came in at $337.9 million, marginally surpassing the Zacks Consensus Estimate of $337.6 million. Further, revenues rose 2.2% from the year-ago figure.

Quarter in Detail

Billboard revenues of $239.3 million in the reported quarter indicated a year-over-year increase of 1.4%. Results primarily benefited from an increase in revenues from the conversion of digital billboards, acquisition of digital billboards in Canada and higher average revenues per display (yield) in U.S. Media. However, these were partially offset by lower proceeds from condemnations.

Transit and other revenues of $98.6 million increased 4.2% from the prior-year quarter. This was due to the impact of new accounting standards on Sports Marketing operating segment and rise in digital transit displays.

Operating expenses of $197.1 million inched up 2.7% year over year, mainly due to higher billboard property-lease costs, relating to New York Metropolitan Transportation Authority (MTA) billboard agreement, impact from the acquisition of digital billboards in Canada and elevated expenses associated with the Sports Marketing operating segment.

Adjusted operating income before depreciation and amortization inched up 1.2% year over year to $81.2 million.

Net cash flow, resulting from operating activities for the year ending Mar 31, 2018, came in at $62.1 million, up from $32.2 million recorded in the comparable period last year. Results were affected, primarily due to the improvement in working capital items and the timing of payments made under the MTA agreement.

As of Mar 31, 2018, Outfront Media’s liquidity position comprised cash of $52.5 million, as well as $331.5 million of availability under its $430 revolving credit facility, net of $88.5 million of issued letters of credit against the revolving credit facility.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

Price and Consensus

 

Price and Consensus | Quote

VGM Scores

At this time, OUT has a nice Growth Score of B, though it is lagging a lot on the momentum front with a D. The stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable for value and growth investors.

Outlook

OUT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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