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American Tower (AMT) Q2 AFFO & Revenues Surpass Estimates

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American Tower Corporation (AMT - Free Report) reported second-quarter 2021 adjusted funds from operations (AFFO) per share of $2.39, surpassing the Zacks Consensus Estimate of $2.34. The bottom line also improved 18.9%, year over year.

The company generated total revenues of $2.3 billion, which topped the Zacks Consensus Estimate of $2.2 billion. Also, the top line grew 20.2%, year over year.

Results reflect improving revenues across all the property segments. American Tower also witnessed strong year-over-year organic tenant billing growth of 4.8%.

Per management, “We expect to leverage the competitive advantage provided by our scaled, diversified portfolio of more than 214,000 communications sites to drive sustainable long-term growth and attractive returns, capitalize on new opportunities associated with 5G and execute our vision of making wireless communication possible everywhere.”

Quarter in Detail

Adjusted EBITDA came in at $1.48 billion, up 21.8% from the prior-year period. Adjusted EBITDA margin was 64.2% in the second quarter of 2021. Operating income summed $849.2 million, up from the year-ago quarter’s $691.3 million.

In the reported quarter, the company spent $8.8 billion to acquire 27,000 communication sites, consisting of 20,000 sites in Germany and Spain, and more than 7000 sites in Brazil, Peru, Chile and Argentina.

Property Segment

Revenues came in at $2.23 billion, up 17.9% on a year-over-year basis. Operating profit was $1.49 billion and operating profit margin came in at 67%.

In the Property segment, revenues from the United States totaled $1.23 billion, up 13.4% year over year. Total international revenues amounted to $1 billion, up 24.1% year over year.

Within this, revenues from the Asia Pacific totaled $298 million, up 9.9 % year over year. Latin America revenues totaled $366 million, rising 24.5% year over year. Africa revenues grossed $248 million, up 20.4% on a year-over-year basis, and Europe revenues of $88 million improved significantly from the year-ago figure of $35 million.

Services Segment

Revenues totaled $66 million, significantly high from the prior-year quarter’s $20 million. Operating profit came in at $37 million and operating profit margin was 56% in the June-end quarter.

Cash Flow and Liquidity

In the second quarter, American Tower generated $952 million of cash from operating activities, declining 3.7% year over year. Free cash flow in the period was $666 million, down 13.2% year over year.

At the end of the second quarter, the company had $4.7 billion in total liquidity. This comprised $1.9 billion in cash and cash equivalents, and availability of $2.8 billion under its revolving credit facilities (net of any outstanding letters of credit).

Other Developments

During the second quarter, American Tower announced the sale of a 10% and 30% stake in ATC Europe to Allianz Capital Partners and Canadian investment firm, CDPQ respectively, in a transaction valued at $3.1 billion. The transaction, expected to close in the third quarter of 2021, is subject to customary closing conditions. This move will provide capital for strengthening the company’s European business.

2021 Outlook

The company has taken in to consideration the above-mentioned agreement while issuing the 2021 guidance.

American Tower anticipates total property revenues of $8,985-$9,135 million, suggesting a year-over-year improvement of 13.9% at the mid-point. Adjusted EBITDA is projected at $5,860-$5,960 million, indicating a mid-point increase of 14.6% from the prior year. Consolidated AFFO is expected to be $4,255-$4,355 million, calling for a year-over-year mid-point expansion of 13.6%.

Currently, American Tower carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

American Tower Corporation Price, Consensus and EPS Surprise American Tower Corporation Price, Consensus and EPS Surprise

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

Performance of Other REITs

Prologis, Inc. (PLD - Free Report) came up with second-quarter core FFO per share of $1.01, surpassing the Zacks Consensus Estimate of 99 cents. Results underlined all-time low vacancies in its markets that aided rent growth and valuation increases.

Boston Properties Inc.’s (BXP - Free Report) second-quarter 2021 FFO per share of $1.72 beat the Zacks Consensus Estimate of $1.61. The quarterly figure also exceeded the mid-point of the company’s second-quarter guidance by 12 cents, highlighting an improved portfolio performance, and better-than-projected parking, hotel, retail and termination income.

Highwoods Properties, Inc.’s (HIW - Free Report) quarterly FFO per share of 93 cents topped the Zacks Consensus Estimate by a cent. Rental and other revenues of $185.5 million outpaced the consensus mark of $184.9 million.

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.