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SBA Communications (SBAC) Q4 AFFO Misses Estimates, Stock Down
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Shares of SBA Communications Corporation (SBAC - Free Report) lost 1.7% in after-hours trading following the release of its fourth-quarter and full-year 2022 results. Quarterly adjusted funds from operations (AFFO) per share of $3.11 lagged the Zacks Consensus Estimate of $3.13. Nonetheless, this reflects a rise of 10.7% from the prior-year quarter.
SBAC witnessed an improvement in site-leasing and site-development businesses, which supported the top line. It continues to benefit from the addition of sites to its portfolio.
Quarterly total revenues increased 15.3% year over year to $686.1 million, outpacing the Zacks Consensus Estimate of $681.8 million.
Per Jeffrey Stoops, president and CEO of the company, “The US market remains active, with our largest US customers expected to all stay relatively busy with additional network deployment in 2023. We believe domestic activity will remain solid through 2023 and perhaps beyond, given the size and scope of our customers’ 5G deployment plans and our belief that much 5G work remains to be done on our assets.”
Quarter in Detail
Site-leasing revenues were up 13% year over year to $609.6 million. This consisted of domestic site-leasing revenues of $452.9 million and international site-leasing revenues of $156.7 million. The domestic cash site-leasing revenues were $443 million, growing 5.1%. International cash site leasing revenues were $157.5 million, jumping 45.7%.
Site-development revenues increased 36.9% to $76.5 million.
The site-leasing operating profit summed $494.6 million, marking an increase of 11.8%. Moreover, 96.3% of SBAC’s total operating profit in the quarter came from site leasing.
The overall operating income rose 18.9% to $234.7 million.
The adjusted EBITDA totaled $460.7 million, up 12.6%, while the adjusted EBITDA margin declined to 68.1% from 69.8% in the prior-year quarter.
Portfolio Activity
In the October-December quarter, SBAC acquired 2,642 communication sites for total cash consideration of $736.7 million, including 2,632 sites from Grupo TorreSur in Brazil for roughly $725.0 million in cash. The company also built 162 towers during this period. It owned or operated 39,311 communication sites as of Dec 31, 2022, of which 17,416 were in the United States and its territories and 21,895 internationally.
SBA Communications also spent $15.9 million to purchase land and easements and extend lease terms. Total cash capital expenditure was $823.5 million in the reported quarter, of which $13.8 million was non-discretionary and $809.7 million represented discretionary.
Subsequent to the quarter end, SBAC purchased or is under contract to buy 31 communication sites for a total consideration of $23.2 million in cash. It expects to complete the acquisition by the end of second-quarter 2023.
Cash Flow & Liquidity
In the fourth quarter, SBA Communications generated $288.6 million of net cash from operating activities compared with the year-ago quarter’s $298.6 million.
As of Dec 31, 2022, it had $143.7 million in cash and cash equivalents, down from $367.3 million recorded at the end of December 2021. SBAC ended the quarter with net debt-to-annualized adjusted EBITDA of 6.9X.
As of Feb 20, 2023, the company had $585 million outstanding under the $1.5 billion revolving credit facility.
During the fourth quarter of 2022, SBAC did not repurchase any shares of its Class A common stock. As of Feb 20, 2023, it had $504.7 million of authorization remaining under its approved repurchase plan.
Upbeat 2023 Outlook
It expects AFFO per share of $12.46-$12.83. The Zacks Consensus Estimate for the same is currently pegged at $12.75, which lies in the guided range.
Site-leasing revenues are now projected to be $2,469-$2,489 million. Site-development revenues are expected to lie between $205 million and $225 million. The adjusted EBITDA is estimated to be in the band of $1,845-$1,865 million.
Dividend Update
Concurrently, SBAC announced a cash dividend of 85 cents on its Class A common stock, representing a 20% hike from the prior payout. The dividend will be paid out on Mar 24 to shareholders on record as of Mar 10.
SBA Communications Corporation Price, Consensus and EPS Surprise
SITE Centers Corp. (SITC - Free Report) reported fourth-quarter 2022 operating funds from operations (OFFO) per share of 29 cents, beating the Zacks Consensus Estimate by a penny. However, the figure was lower than the prior-year quarter’s 30 cents.
SITC’s results reflect healthy leasing activity and a year-over-year improvement in annualized base rent.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported fourth-quarter 2022 AFFO per share of $2.14, surpassing the Zacks Consensus Estimate by a cent. The reported figure also compared favorably with the year-ago quarter’s $1.97.
ARE’s results reflected decent leasing activity and rental rate growth during the quarter.
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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SBA Communications (SBAC) Q4 AFFO Misses Estimates, Stock Down
Shares of SBA Communications Corporation (SBAC - Free Report) lost 1.7% in after-hours trading following the release of its fourth-quarter and full-year 2022 results. Quarterly adjusted funds from operations (AFFO) per share of $3.11 lagged the Zacks Consensus Estimate of $3.13. Nonetheless, this reflects a rise of 10.7% from the prior-year quarter.
SBAC witnessed an improvement in site-leasing and site-development businesses, which supported the top line. It continues to benefit from the addition of sites to its portfolio.
Quarterly total revenues increased 15.3% year over year to $686.1 million, outpacing the Zacks Consensus Estimate of $681.8 million.
Per Jeffrey Stoops, president and CEO of the company, “The US market remains active, with our largest US customers expected to all stay relatively busy with additional network deployment in 2023. We believe domestic activity will remain solid through 2023 and perhaps beyond, given the size and scope of our customers’ 5G deployment plans and our belief that much 5G work remains to be done on our assets.”
Quarter in Detail
Site-leasing revenues were up 13% year over year to $609.6 million. This consisted of domestic site-leasing revenues of $452.9 million and international site-leasing revenues of $156.7 million. The domestic cash site-leasing revenues were $443 million, growing 5.1%. International cash site leasing revenues were $157.5 million, jumping 45.7%.
Site-development revenues increased 36.9% to $76.5 million.
The site-leasing operating profit summed $494.6 million, marking an increase of 11.8%. Moreover, 96.3% of SBAC’s total operating profit in the quarter came from site leasing.
The overall operating income rose 18.9% to $234.7 million.
The adjusted EBITDA totaled $460.7 million, up 12.6%, while the adjusted EBITDA margin declined to 68.1% from 69.8% in the prior-year quarter.
Portfolio Activity
In the October-December quarter, SBAC acquired 2,642 communication sites for total cash consideration of $736.7 million, including 2,632 sites from Grupo TorreSur in Brazil for roughly $725.0 million in cash. The company also built 162 towers during this period. It owned or operated 39,311 communication sites as of Dec 31, 2022, of which 17,416 were in the United States and its territories and 21,895 internationally.
SBA Communications also spent $15.9 million to purchase land and easements and extend lease terms. Total cash capital expenditure was $823.5 million in the reported quarter, of which $13.8 million was non-discretionary and $809.7 million represented discretionary.
Subsequent to the quarter end, SBAC purchased or is under contract to buy 31 communication sites for a total consideration of $23.2 million in cash. It expects to complete the acquisition by the end of second-quarter 2023.
Cash Flow & Liquidity
In the fourth quarter, SBA Communications generated $288.6 million of net cash from operating activities compared with the year-ago quarter’s $298.6 million.
As of Dec 31, 2022, it had $143.7 million in cash and cash equivalents, down from $367.3 million recorded at the end of December 2021. SBAC ended the quarter with net debt-to-annualized adjusted EBITDA of 6.9X.
As of Feb 20, 2023, the company had $585 million outstanding under the $1.5 billion revolving credit facility.
During the fourth quarter of 2022, SBAC did not repurchase any shares of its Class A common stock. As of Feb 20, 2023, it had $504.7 million of authorization remaining under its approved repurchase plan.
Upbeat 2023 Outlook
It expects AFFO per share of $12.46-$12.83. The Zacks Consensus Estimate for the same is currently pegged at $12.75, which lies in the guided range.
Site-leasing revenues are now projected to be $2,469-$2,489 million. Site-development revenues are expected to lie between $205 million and $225 million. The adjusted EBITDA is estimated to be in the band of $1,845-$1,865 million.
Dividend Update
Concurrently, SBAC announced a cash dividend of 85 cents on its Class A common stock, representing a 20% hike from the prior payout. The dividend will be paid out on Mar 24 to shareholders on record as of Mar 10.
SBA Communications Corporation Price, Consensus and EPS Surprise
SBA Communications Corporation price-consensus-eps-surprise-chart | SBA Communications Corporation Quote
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other REITs
SITE Centers Corp. (SITC - Free Report) reported fourth-quarter 2022 operating funds from operations (OFFO) per share of 29 cents, beating the Zacks Consensus Estimate by a penny. However, the figure was lower than the prior-year quarter’s 30 cents.
SITC’s results reflect healthy leasing activity and a year-over-year improvement in annualized base rent.
Alexandria Real Estate Equities, Inc. (ARE - Free Report) reported fourth-quarter 2022 AFFO per share of $2.14, surpassing the Zacks Consensus Estimate by a cent. The reported figure also compared favorably with the year-ago quarter’s $1.97.
ARE’s results reflected decent leasing activity and rental rate growth during the quarter.
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.