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OUTFRONT Media (OUT) Q1 AFFO Meets Estimates, Revenues Up Y/Y

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OUTFRONT Media Inc. (OUT - Free Report) reported first-quarter 2024 adjusted funds from operations (AFFO) per share of 14 cents, in line with the Zacks Consensus Estimate.

The rise in billboard revenues in the quarter aided decent year-over-year top-line growth. However, higher interest expense and operating expenses acted as a dampener. Reflecting the negative sentiments of investors, shares of the company have lost 5.92% in the May 3 normal trading session on the NYSE.

Quarterly revenues came in at $408.5 million, missing the Zacks Consensus Estimate of $408.8 million.

On a year-over-year basis, AFFO per share increased significantly and revenues rose 3.2%.

According to Jeremy Male, chairman and CEO of OUTFRONT Media, “Strong local trends drove solid first-quarter financial results, with total revenue up over 3% and Adjusted OIBDA up 10%. It was particularly pleasing to see good growth in transit during the period, and encouragingly, this trend has continued into the second quarter.”

Quarter in Detail

During the reported quarter, billboard revenues were $328.8 million, reflecting year-over-year growth of 2.6%. The upside resulted mainly due to an increase in average revenue per display and the impact of new and lost billboards in the period, partially offset by lower proceeds from condemnations.

The company’s transit and other revenues of $79.7 million increased 6% from the year-ago quarter. The rise was primarily due to an increase in average revenue per display, partially offset by the impact of new and lost transit franchise contracts.

OUTFRONT Media’s operating income totaled $14 million in the first quarter compared with an operating income of $10.2 million in the year-ago quarter.

Operating expenses were $238.7 million, which increased 1.4% year over year. The rise was mostly due to higher posting, maintenance and other expenses, offset slightly by lower transit franchise expenses.

Net interest expense of $41.4 million increased 9.8% from $37.7 million in the prior-year period, mainly due to higher interest rates and a greater average debt balance compared to the same prior-year period. The weighted average cost of debt, as of Mar 31, 2024, was 5.7% compared with 5.4% in the prior-year period.

Cash Flow & Balance Sheet

Net cash flow provided by operating activities for the three months ended Mar 31, 2024, was $30.2 million, which increased from $9.4 million in the prior-year period.

As of Mar 31, 2024, OUTFRONT Media’s liquidity position comprised unrestricted cash of $42.4 million and $493.6 million of availability under its $500 million revolving credit facility, net of $6.4 million of issued letters of credit.

In the reported quarter, no shares of the company's common stock were sold under its at-the-market (ATM) equity program. It had $232.5 million available under the ATM program at the quarter’s end.

Dividend Update

Concurrent with its first-quarter earnings release, OUTFRONT Media announced its common stock quarterly cash dividend of 30 cents per share. The dividend will be paid out on Jun 28 to its shareholders of record as of Jun 7, 2024.


OUTFRONT Media Inc. Price, Consensus and EPS Surprise

OUTFRONT Media Inc. Price, Consensus and EPS Surprise

OUTFRONT Media Inc. price-consensus-eps-surprise-chart | OUTFRONT Media Inc. Quote


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

Performance of Other REITs

Ventas, Inc. (VTR - Free Report) reported a first-quarter 2024 normalized funds from operations (FFO) per share of 78 cents, beating the Zacks Consensus Estimate of 74 cents. The reported figure increased 5.4% from the prior-year quarter’s tally.

Results reflected better-than-anticipated revenues. Also, Ventas’ same-store cash net operating income (NOI) increased year over year on strong performance across the portfolio, except for triple-net leased properties.  It has also raised its 2024 outlook.

Healthpeak Properties, Inc. (DOC - Free Report) reported first-quarter 2024 FFO as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a penny. The reported figure rose 7.1% from the prior-year quarter.

Results reflected better-than-anticipated revenues. Moreover, growth in total merger-combined same-store cash (adjusted) NOI was witnessed across the portfolio. The company also revised its 2024 outlook.

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

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