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What Awaits American Tower (AMT) this Earnings Season?
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Leading international wireless tower operator, American Tower Corp. (AMT - Free Report) , is slated to report third-quarter 2016 results, before the opening bell on Oct 27.
Last quarter, American Tower posted a positive earnings surprise of 3.76%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in all of the previous four quarters, with an average beat of 6.16%. Let’s see how things are shaping up for this announcement.
Factors at Play
American Tower is poised to benefit from increased investment by wireless carriers as they are forging ahead with the deployment of 5G networks. Moreover, the company has been focusing on its operations in India which include the acquisition of a 51% stake in Viom Networks and the tower deal with Bharti Airtel’s Tanzania unit. These transactions will increase the tower count as well as help the company build stronger ties with mobile network operators such as Bharti Airtel, Vodafone, Idea, Tata, Reliance and Aircel. Going forward, we believe that American Tower’s tower buyouts in emerging markets should help drive its top line and lend it a competitive edge over rivals.
American Tower’s Indian, EMEA and Latin American operations together accounted for nearly 50% of its organic core revenue growth. Notably, in order to support the rising demand for LTE, American Tower plans to construct nearly 2,500 sites globally in 2016. Increased spending on 4G LTE networks has resulted in the massive upside in organic revenues. Mobile subscriber growth has significantly boosted the wireless tower industry.
However, American Tower has a substantially leveraged balance sheet. Additionally, customer concentration is very high for American Tower and the top four customers account for nearly 60% of its quarterly revenues. The loss of any of these customers or consolidation among them will have a significant impact on the company’s top line. Further, the ongoing consolidation trend among telecom and cable TV operators may generate significant financial fluctuations for the company. Also, foreign currency exchange rate risks, stiff competition, integration risks, rising operating expenses and its geographic diversification into the emerging Asian and Latin American markets may act as headwinds for the company. Additionally, the company faces threats from emerging technologies like Voice over WiFi.
Earnings Whispers
Our proven model does not conclusively show that American Toweris likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: American Tower has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.39. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: American Tower has a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Here are some companies that have the right combination of elements to post an earnings beat this quarter.
Apple Inc. (AAPL - Free Report) , with an earnings ESP of +1.21% and a Zacks Rank #2.The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters.
Open Text Corporation (OTEX - Free Report) , with an earnings ESP of +6.12% and a Zacks Rank #2.The company’s earnings beat the Zacks Consensus Estimate in two of the previous four quarters.
Yahoo! Inc. , with an earnings ESP of +7.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. The company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters.
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What Awaits American Tower (AMT) this Earnings Season?
Leading international wireless tower operator, American Tower Corp. (AMT - Free Report) , is slated to report third-quarter 2016 results, before the opening bell on Oct 27.
Last quarter, American Tower posted a positive earnings surprise of 3.76%. Moreover, the company’s earnings surpassed the Zacks Consensus Estimate in all of the previous four quarters, with an average beat of 6.16%. Let’s see how things are shaping up for this announcement.
Factors at Play
American Tower is poised to benefit from increased investment by wireless carriers as they are forging ahead with the deployment of 5G networks. Moreover, the company has been focusing on its operations in India which include the acquisition of a 51% stake in Viom Networks and the tower deal with Bharti Airtel’s Tanzania unit. These transactions will increase the tower count as well as help the company build stronger ties with mobile network operators such as Bharti Airtel, Vodafone, Idea, Tata, Reliance and Aircel. Going forward, we believe that American Tower’s tower buyouts in emerging markets should help drive its top line and lend it a competitive edge over rivals.
American Tower’s Indian, EMEA and Latin American operations together accounted for nearly 50% of its organic core revenue growth. Notably, in order to support the rising demand for LTE, American Tower plans to construct nearly 2,500 sites globally in 2016. Increased spending on 4G LTE networks has resulted in the massive upside in organic revenues. Mobile subscriber growth has significantly boosted the wireless tower industry.
However, American Tower has a substantially leveraged balance sheet. Additionally, customer concentration is very high for American Tower and the top four customers account for nearly 60% of its quarterly revenues. The loss of any of these customers or consolidation among them will have a significant impact on the company’s top line. Further, the ongoing consolidation trend among telecom and cable TV operators may generate significant financial fluctuations for the company. Also, foreign currency exchange rate risks, stiff competition, integration risks, rising operating expenses and its geographic diversification into the emerging Asian and Latin American markets may act as headwinds for the company. Additionally, the company faces threats from emerging technologies like Voice over WiFi.
Earnings Whispers
Our proven model does not conclusively show that American Toweris likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: American Tower has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.39. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: American Tower has a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
AMER TOWER CORP Price and EPS Surprise
AMER TOWER CORP Price and EPS Surprise | AMER TOWER CORP Quote
Stocks to Consider
Here are some companies that have the right combination of elements to post an earnings beat this quarter.
Apple Inc. (AAPL - Free Report) , with an earnings ESP of +1.21% and a Zacks Rank #2.The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters.
Open Text Corporation (OTEX - Free Report) , with an earnings ESP of +6.12% and a Zacks Rank #2.The company’s earnings beat the Zacks Consensus Estimate in two of the previous four quarters.
Yahoo! Inc. , with an earnings ESP of +7.69% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. The company’s earnings surpassed the Zacks Consensus Estimate in two of the previous four quarters.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>