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Lamar's (LAMR) Q1 Adjusted FFO Falls Y/Y, Stock Declines

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Shares of Lamar Advertising Company (LAMR - Free Report) dropped 5.03% during Thursday’s regular trading session after this REIT reported a 6% year-over-year decrease in adjusted funds from operations (AFFO) per share in the first quarter.

LAMR reported a first-quarter AFFO per share of $1.41 compared with the year-ago quarter’s $1.50. However, the figure exceeded the Zacks Consensus Estimate of $1.32.

Per management, the company experienced steady local sales, which helped offset softness on the national front. Interest expenses flared up 54.7% year over year to $41.4 million.

Quarterly net revenues came in at $471.3 million, marginally surpassing the consensus mark of $470.5 million. Net revenues for the quarter increased 4.4% on a year-over-year basis.

According to Lamar Advertising’s chief executive, Sean Reilly, "Looking ahead, while April saw some slight softening in business activity, we remain confident in the midpoint of our guidance because of the hard work our team has done managing expenses."

Quarter in Detail

The operating income of $118.8 million decreased from the year-earlier period’s $120.5 million, while the adjusted EBITDA increased 3.5% to $198.0 million.

Acquisition-adjusted net revenues for the first quarter climbed 1.5% year over year. Also, acquisition-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 0.8%.

As of Mar 31, 2023, Lamar Advertising had total liquidity of $663.0 million. This comprised $625.9 million available for borrowing under its revolving senior credit facility, $3.6 million under its Accounts Receivable Securitization Program and $33.5 million in cash and cash equivalents.

Moreover, free cash flow of $113.3 million decreased 15.8% year over year during the March-end quarter.

Lamar Advertising 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 Another REIT

OUTFRONT Media Inc. (OUT - Free Report) reported a first-quarter 2023 AFFO per share of 5 cents, missing the Zacks Consensus Estimate of 16 cents. The figure was also lower than the prior-year quarter’s tally of 23 cents. Results reflected higher operating expenses and interest expenses in the quarter.

However, quarterly revenues of $395.8 million surpassed the Zacks Consensus Estimate of $383.8 million and climbed nearly 6% year over year. Higher billboard revenues contributed to this rise.

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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