It has been about a month since the last earnings report for Outfront Media (OUT - Free Report) . Shares have added about 1.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Outfront Media due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
OUTFRONT Media Q1 FFO Beat Estimates, Revenues Up
OUTFRONT Media reported first-quarter 2019 FFO per share of 28 cents, marginally surpassing the Zacks Consensus Estimate of 27 cents. Further, the figure improves from the year-ago tally of 27 cents.
The company witnessed growth in billboard and transit revenues in its U.S. Media segment. Adjusted OIBDA also improved year over year.
Revenues in the reported quarter came in at $371.7 million, comfortably beating the Zacks Consensus Estimate of $364.7 million. The top line also climbed 10.2% from the year-ago quarter’s reported figure.
Quarter in Detail
Billboard revenues of $251 million in the reported quarter indicate a year-over-year increase of 4.9%, driven by higher revenues from digital billboard conversions.
Transit and other revenues of $120.7 million were up 22.4% from the prior-year quarter’s reported figure. This upside stemmed from improvement in yield as well as the net effect of won and lost franchises during the first quarter.
Operating expenses of $216.9 million flared up 10% year over year, primarily owing to higher transit franchise expenses, the addition of San Francisco Bay Area Rapid Transit (BART) transit franchise agreement, escalating posting, maintenance and other expenses, and billboard lease expense.
Operating income improved 16.4% year over year to $36.9 million.
Net cash flow, resulting from operating activities for the quarter ending Mar 31, 2019, came in at $41.4 million, plunging 33.3% recorded in the comparable period last year. Results were affected primarily due to pre-paid equipment deployment costs under the MTA agreement.
As of Mar 31, 2019, OUTFRONT Media’s liquidity position comprised unrestricted cash of $52.7 million and $328.9 million of availability under its $430-million revolving credit facility, net of $66 .1 million of issued letters of credit.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
At this time, Outfront Media has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Outfront Media has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.