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American Tower (AMT) Q3 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 $2.49, surpassing the Zacks Consensus Estimate of $2.33. The bottom line also improved 11.7%, year over year.

The company generated total revenues of $2.45 billion, which topped the consensus mark of $2.4 billion. Also, the top line grew 21.9%, year over year.

Results reflect improving revenues across all of the property segments. American Tower also recorded strong year-over-year organic tenant billing growth of 4.9%.

Per management, “We saw strong demand trends across our global business in the third quarter, supported by carrier investments in network densification, new network technologies and spectrum deployments.”

Quarter in Detail

The adjusted EBITDA came in at $1.55 billion, up 19.5% from the prior-year period. The adjusted EBITDA margin was 63.2% in the third quarter of 2021. The operating income summed $827.5 million, up from the year-ago quarter’s $785.1 million.

In the reported quarter, the company spent $700 million to acquire 4,369 communication sites, consisting of 4,000 remaining communications sites in Germany as part of the company’s proposed transaction with Telxius Telecom, S.A.

Property Segment

The quarterly revenues came in at $2.37 billion, up 19.2% on a year-over-year basis. The operating profit was $1.55 billion and operating profit margin came in at 65%.

In the Property segment, revenues from the United States totaled $1.23 billion, up 9.7% year over year. The total international revenues amounted to $1.14 billion, up 31.5% year over year.

Within this, third-quarter revenues from the Asia Pacific totaled $314 million, up 2.7% year over year. The Latin America revenues totaled $391 million, rising 29.7% year over year. The Africa revenues grossed $257 million, up 17% on a year-over-year basis, and the Europe revenues of $176 million improved significantly from the year-ago figure of $39 million.

Services Segment

Revenues totaled $85 million during the reported quarter, significantly up from the prior-year quarter’s $25 million. The operating profit came in at $51 million and the operating profit margin was 59% in the September-end quarter.

Cash Flow and Liquidity

In the third quarter, American Tower generated $2.1 billion of cash from operating activities, substantially up, year over year. Free cash flow in the period was $1.78 billion, significantly up year over year.

At the end of the third quarter, the company had $8.7 billion in total liquidity. This comprised $3.3 billion in cash and cash equivalents, and availability of $5.4 billion under its revolving credit facilities (net of any outstanding letters of credit).

Other Developments

During the July-September quarter, American Tower closed its proposed transaction with Allianz Capital Partners and Canadian investment firm, CDPQ, respectively, for a total aggregate consideration of $3.1 billion.

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 $9,035-$9,105 million, suggesting a year-over-year improvement of 14% at the mid-point.

The adjusted EBITDA is projected at $5,930-$5,990 million, indicating a mid-point increase of 15.6% from the prior year. The consolidated AFFO is expected to be $4,335-$4,395 million, calling for a year-over-year mid-point expansion of 15.2%.

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 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

We now look forward to the earnings releases of other REITs like Apple Hospitality REIT, Inc. (APLE - Free Report) , CubeSmart (CUBE - Free Report) and Sunstone Hotel Investors, Inc. (SHO - Free Report) scheduled for Nov 4.

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.