Lamar Advertising Company (LAMR - Free Report) reported third-quarter 2018 adjusted funds from operations (AFFO) of $1.51 per share, comfortably surpassing the Zacks Consensus Estimate of $1.47. This also marks a 7.9% increase from the year-ago tally of $1.40 per share.
Robust top-line growth supported results. However, operating income declined year over year on account of higher operating expenses.
Net revenues for the third quarter climbed 4.8% from the prior-year tally to $418.5 million. Moreover, the revenue figure outpaced the Zacks Consensus Estimate of $421.4 million.
Quarter in Detail
Operating income decreased to $128.4 million from $131.7 million recorded in the year-ago period. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 5.3%, year over year, to $192.5 million. Additionally, free cash flow of $130.7 million in the Sep-end quarter was up 7% year over year.
At the end of third-quarter 2018, Lamar had total liquidity of $342.6 million, of which $332 million was available under its revolving senior credit facility, and $10.6 million in cash and cash equivalents.
Lamar reiterated its projection of AFFO per share to $5.30-$5.40. The Zacks Consensus Estimate for the same is currently pegged at $5.38.
Lamar’s impressive national footprint and leading position as a provider of logo signs in the United States enabled the company to record higher revenues during the Jul-Sep period. Nevertheless, escalating expenses is detrimental for the company’s margin growth.
Going forward, elevated investment expenditures for acquisitions are likely to unfavorably impact the company’s profitability. Furthermore, rising interest rates and competition from other outdoor advertisers remain growth hurdles.