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Lamar's (LAMR) AFFO and Revenues Surpass Estimates in Q3

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Lamar Advertising Company (LAMR - Free Report) reported a 6.8% year-over-year jump in third-quarter adjusted funds from operations (AFFO) per share to $2.03. The figure also surpassed the Zacks Consensus Estimate of $1.89.

Results reflect better-than-anticipated revenues aided by the solid recovery in the U.S. advertising market and continued sales momentum across its billboard, transit and airport and logos businesses.

Quarterly net revenues came in at $527.4 million, surpassing the consensus mark of $521.2 million. Net revenues for the quarter increased 10.6% on a year-over-year basis.

However, reflecting broader market concerns, shares of the company lost 1.05% during Nov 4 regular trading session.

Per the company’s chief executive, Sean Reilly, “We expect our expense growth to continue to normalize in the fourth quarter and into 2023, and based on current pacings, we are tracking to the top of our previously provided guidance range for full-year diluted AFFO per share.”

Quarter in Detail

Acquisition-adjusted net revenues in the third quarter climbed 6% year over year. Also, acquisition-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 5.7%.

The operating income of $181 million increased from the year-earlier period’s $133.3 million, while the adjusted EBITDA jumped 8.9% to $251.2 million. Moreover, free cash flow of $176 million increased 1.3% year over year during the quarter.

Cash Flow & Balance Sheet

The cash flow provided by operating activities in the three months ended Sep 30, 2022, was $224.5 million compared with $203 million recorded in the year-ago period.

As of Sep 30, 2022, Lamar Advertising had total liquidity of $857.3 million. This comprised $738.7 million available for borrowing under its revolving senior credit facility, $39.2 million under its accounts receivable securitization program and $79.4 million in cash and cash equivalents. As of the same date. There were no borrowings outstanding under its revolving credit facility.

2022 Guidance

Management noted that the company is tracking to the top end of its earlier-provided range for the full-year diluted AFFO per share.

In the first-quarter earnings release, LAMR updated its guidance issued in February 2022 and projected the AFFO per share to lie between $7.20 and $7.35. The Zacks Consensus Estimate for the same is currently pegged at $7.24.

Lamar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lamar Advertising Company Price, Consensus and EPS Surprise Lamar Advertising Company Price, Consensus and EPS Surprise

Lamar Advertising Company price-consensus-eps-surprise-chart | Lamar Advertising Company Quote

Performance of Other REITs

OUTFRONT Media Inc. (OUT - Free Report) reported third-quarter AFFO per share of 53 cents, missing the Zacks Consensus Estimate of 55 cents. The figure was also a cent lower than the prior-year quarter’s tally.

Results reflect higher operating expenses.

OUT’s quarterly revenues of $453.7 million, too, missed the Zacks Consensus Estimate by 0.08%.

Nonetheless, on a year-over-year basis, revenues climbed 13.7%. Higher billboard revenues and transit and other revenues attributed to this increase.

Public Storage's (PSA - Free Report) third-quarter 2022 core FFO per share of $4.13 surpassed the Zacks Consensus Estimate of $4.05. The figure also increased 20.8% year over year.

PSA’s results reflect better-than-anticipated top-line growth alongside an improvement in the realized annual rent per occupied square foot. The company also benefited from its expansion efforts through acquisitions, developments and extensions. It raised its guidance for 2022 FFO per share.
Host Hotels & Resorts, Inc. (HST - Free Report) reported third-quarter adjusted FFO per share of 38 cents, a whopping jump of 90% from the prior-year quarter’s 20 cents. The Zacks Consensus Estimate for the same was pegged at 39 cents.  
Results reflect better-than-anticipated top-line growth. Solid leisure travel demand for HST’s resorts and hotels in the Sunbelt markets and Hawaii region and improving group and business travel demand in urban markets aided its performance. The company also revised its outlook for 2022.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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