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American Tower (AMT) Q2 AFFO Tops Estimate, Revenues Miss

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American Tower Corporation (AMT - Free Report) reported second-quarter 2020 adjusted funds from operations (AFFO) per share of $2.07, beating the Zacks Consensus Estimate of $2.05. Further, the reported figure improved 1.5%, year over year.

The company generated total revenues of $1.91 billion, which missed the Zacks Consensus Estimate of $1.95 billion. Nonetheless, the figure improved 1.2% year over year.

The company witnessed strong organic tenant billing growth. However, results were adversely impacted by a decline in revenues in the Asia and Latin America property segment.

Quarter in Detail

Adjusted EBITDA in the reported quarter was $1.21 billion, up 2.4% from the prior-year quarter. Adjusted EBITDA margin was 63.3% in the second quarter of 2020. Operating income was $691.3 million, up 1.1% from the year-ago quarter’s figure.

During the second quarter, the company spent around $128 million to acquire 350 communications sites primarily in international markets.

Cash Flow and Liquidity

In the second quarter of 2020, American Tower generated $989 million of cash from operating activities, declining 4.6% year over year. Free cash flow during the period was $768 million, down 2.7% year over year.

At the end of the second quarter, the company had $6.5 billion of total liquidity. This comprised $2 billion in cash and cash equivalents, and availability of $4.5 billion under its revolving credit facilities (net of any outstanding letters of credit).

Property Segment

Quarterly revenues grossed $1.89 billion, up 2.4% year over year. Operating profit was $1.24 billion and operating profit margin was 66% during second-quarter 2020.

In the Property segment, revenues from the United States totaled $1,088 million, up 8% year over year. Further, total international revenues amounted to $806 million, down 4.3% year over year.

Within this, revenues from Asia totaled $271 million, declining 15.5% year over year, while Latin America revenues totaled $294 million, down 15% year over year. Africa revenues grossed $206 million, up 45.7% year over year, while Europe revenues of $35 million improved 3.3% from the year-ago period.

Services Segment

Quarterly revenues totaled $19.8 million, down 51.4% year over year. Operating profit was $8 million and operating profit margin was 42% during the June-end quarter.

Outlook

For 2020, American Tower anticipates property revenues of $7,655-$7,785 million, reflecting a year-over-year improvement of 3.4% at the mid-point. Adjusted EBITDA is projected at $4,890-$4,970 million, indicating a mid-point increase of 3.9% from the prior year’s reported figure. Consolidated AFFO is estimated to be $3,630-$3,710 million, suggesting a year-over-year mid-point expansion of 4.2%.

Currently, American Tower 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 REIT Price, Consensus and EPS Surprise

 

American Tower Corporation REIT Price, Consensus and EPS Surprise

American Tower Corporation REIT price-consensus-eps-surprise-chart | American Tower Corporation REIT Quote

We now look forward to the earnings releases of other REITs like Healthcare Trust of America, Inc. , National Storage Affiliates Trust (NSA - Free Report) and Iron Mountain Incorporated (IRM - Free Report) . All three companies are scheduled to release quarterly numbers on Aug 6.

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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