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SBA Communications (SBAC) Tops on Q4 Earnings, Issues View

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SBA Communications (SBAC - Free Report) reported strong financial results for the fourth quarter of 2017, wherein the top and the bottom lines outpaced the Zacks Consensus Estimate.

Headquartered in Boca Raton, FL, SBA Communications is a leading independent owner and operator of wireless communications infrastructure in North, Central and South America. Currently, it is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company competes against market behemoths like American Tower (AMT - Free Report) and Crown Castle International (CCI - Free Report) in the global wireless tower market.

Net Income

Net income for the fourth quarter of 2017 was $7.7 million or 6 cents per share compared with $5.3 million or 4 cents per share in the year-ago quarter. After adjusting for non-recurring gains, earnings per share in the reported quarter were 23 cents, well above the Zacks Consensus Estimate of 18 cents.

SBA Communications Corporation Price, Consensus and EPS Surprise

 

SBA Communications Corporation Price, Consensus and EPS Surprise | SBA Communications Corporation Quote

Revenues

Total revenues of approximately $443.1 million increased 6.4% year over year, outpacing the Zacks Consensus Estimate of $437.5 million.

As of Dec 31, 2017, SBA Communications owned total sites of 27,909. Of the total, 15,979 were domestic and 11,930 were international sites.

Site Leasing Segment

Quarterly revenues came in at $414.1 million compared with $393.6 million in the year-ago quarter. Domestic Site Leasing revenues totaled $333.5 million, increasing 3.4% year over year. International Site Leasing revenues came in at $80.5 million, reflecting an increase of 13.6% year over year. Segment operating profit was $323.63 million, which marks an increase of 5.4% from the year-ago quarter.

Site Development Segment

Quarterly revenues totaled $28.9 million compared with $22.8 million in the year-ago quarter. Operating profit was $4.9 million, up 51.9% year over year. Operating profit margin improved to 17% from 14.1% in the year-ago quarter.

Operating Metrics

Quarterly operating income improved to $119.1 million in fourth-quarter 2017 from $107.4 million in fourth-quarter 2016. Total operating expenses increased to $323.9 million from $309.1 million in the year-ago quarter. Adjusted EBITDA in the reported quarter was $310.1 million, increasing 8% year over year. Adjusted EBITDA margin was 70.6% compared with 70.0% in the year-ago quarter.

Cash Flow & Liquidity

In the fourth quarter of 2017, SBA Communications generated $228.1 million of cash from operations compared with $215.3 million in the prior-year period.

At the end of the reported quarter, the company had $68.8 million in cash and cash equivalents and around $9,640.4 million of outstanding long-term debt compared with $146.1 million and $8,483.42 million, respectively, at the end of 2016.

Share Repurchase

During the fourth quarter of 2017, the company repurchased 1.9 million shares of its Class A common stock for $311.1 million, at an average price per share of $160.15.

Full-Year 2018 Outlook

SBA Communications provided guidance for 2018. The company expects Site leasing revenues in the range of $1,730-$1,750 million. Site development revenues are projected in the $100-$120 million band. Total revenues are expected between $1,830 million and $1,870 million. Adjusted EBITDA is anticipated between $1,279 million and $1,299 million. Net interest expense is estimated in the range of $346-$356 million. AFFO (adjusted fund flow from operations) is projected in the range of $861-$908 million. AFFO per share is expected between $7.27 million and $7.67 million. Discretionary cash capital expenditures are anticipated between $530 million and $555 million.

Upcoming Release

Investors interested in the broader Computer and Technology sector are keenly awaiting earnings reports from key players, including Broadcom Ltd. (AVGO - Free Report) , which is scheduled to report its first-quarter fiscal 2018 results on Mar 7.

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