American Tower Corp.’s (AMT - Analyst Report) fourth-quarter 2012 net earnings per share came in at 34 cents, missing the Zacks Consensus Estimate of 41 cents. On a GAAP basis, net income in the reported quarter was $135.7 million or 34 cents per share compared with $205.1 million or 52 cents per share in the prior-year quarter. Total revenue of $768.4 million grew 17.6% year over year and beat the Zacks Consensus Estimate of $743.0 million with ease.
Adjusted EBITDA in the reported quarter was $500.6 million, representing an annualized growth of 16.8%. Adjusted EBITDA margin was 65% compared with 66% in the prior-year quarter. Gross margin was 74.7% compared with 74.7% in the year-ago quarter. Selling, general & administrative expenses were $89.4 million compared with $73.9 million in the year-ago quarter. Operating income was $279.2 million, up 12.7% year over year. In the reported quarter, American Tower repurchased 0.6 million shares of its Class A common stock for a total consideration of $46 million.
In 2012, American Tower generated $1,414.4 million in cash from operations against $81,165.9 million in 2011. Adjusted funds from operations (AFFO) in the reported quarter were $289.7 million, up 4.7% from the year-ago quarter. AFFO per share was 72 cents compared with 70 cents in the prior-year quarter.
At the end of 2012, American Tower had $374.6 million in cash and marketable securities and around $8,753.4 million in outstanding debt on its balance sheet compared with $330.2 million and $7,134.5 million, respectively, at the end of 2011. At year-end 2012, debt-to-capitalization ratio was 0.70 against 0.67 at the end of 2011.
Domestic Rental and Management Segment
Quarterly revenue was $499.9 million, up 7.5% year over year. Gross margin came in at 83.1% compared with 80.3% in the year-ago quarter.Operating margin was 78% compared with 76% in the year-ago quarter.
International Rental and Management Segment
Quarterly revenue stood at $239.8 million, showing a 36.3% year-over-year growth. Gross margin for the segment was 61.5% compared with 64.6% in the year-ago quarter.Operating margin was 50% compared with 52% in the year-ago quarter.
Network Development Services Segment
Quarterly revenue was $28.7 million, up by an enormous 133% year over year. Gross margin was 53.2% compared with 39.2% in the year-ago quarter.Operating margin was 45% compared with 17% in the year-ago quarter.
As of Dec 31, 2012, AmericanTower managed 54,323 communications towers, of which 53,850 were for Wireless network and 473 for Broadcasting. Geographically, the company operates 22,260 wireless towers and 274 broadcast towers in the U.S. along with 31,590 wireless towers and 199 broadcast towers outside the U.S.
For 2013, total revenue from the Rental & Management segment is likely to be $3,160 million to $3,210 million. Adjusted EBITDA is anticipated in the band of $2,080 to $2,130 million. AFFO is estimated at around $1,360 -$1,410 million. Net income is estimated around $765 -$840 million. Capital expenditure is expected in the band of $550 -$650 million.
Other Stocks to Consider
AmericanTower currently has a Zacks Rank #3 (Hold). Other stocks in the wireless tower industry include Crown Castle International Corp. (CCI - Analyst Report), SBA Communication Corp. (SBAC - Snapshot Report) and Equinix Inc. (EQIX - Analyst Report). All 3 stocks currently have a Zacks Rank #3 (Hold).