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OUTFRONT Media (OUT) Q4 FFO and Revenues Beat Estimates

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OUTFRONT Media OUT reported fourth-quarter 2019 adjusted funds from operations (FFO) per share of 73 cents, surpassing the Zacks Consensus Estimate of 72 cents by 1.4%. Moreover, the reported figure improved from the prior-year quarter tally of 70 cents.

Revenues came in at $488.1 million for the fourth quarter, beating the Zacks Consensus Estimate of $482.6 million by 1.1%. The revenue figure also climbed 7.9% year over year.

Results highlight higher average revenue per display, increased revenues from digital-billboard conversions and digital transit displays. Also, the adjusted operating income before depreciation and amortization (adjusted OIBDA) was up 5.5% year over year. Nonetheless, mounting transit franchise cost and billboard lease expenses hurt results to some extent.

For full-year 2019, the company reported adjusted FFO per share of $2.33, marking an increase of 8.4% year on year. Full-year revenues came in at $1.8 billion, reflecting an 11% increase from the prior year.

Quarter in Detail

Billboard revenues came in at $321.1 million, indicating year-over-year increase of 6.3%. This upside resulted from higher average revenue per display, which is referred as yield, and increased revenues from digital-billboard conversions.

Transit and other revenues of $167 million were up 11.1%, year on year. Growth in revenues from digital transit displays and improvement in yield resulted in this upswing.

However, operating expenses of $255.9 million flared up 8.7% year over year. This upsurge mainly resulted from elevated transit franchise expenses and higher billboard lease expense.

Nevertheless, operating income improved 7.3% to $98 million in the reported quarter on solid revenues.

Balance Sheet

Net cash flow, resulting from operating activities for the year ended Dec 31, 2019, came in at $276.9 million, up 29.2% year on year. Results primarily reflect the impact of higher net income. However, this was partly offset by higher pre-paid equipment deployment costs associated with its New York Metropolitan Transportation Authority transit franchise.

As of Dec 31, 2019, OUTFRONT Media enjoyed a solid liquidity position, which comprised unrestricted cash of $59.1 million and $498.4 million of availability under its $500-million revolving credit facility, net of $1.6 million of issued letters of credit.

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, OUTFRONT Media carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Prologis, Inc. PLD currently carries a Zacks Rank of 2. The company’s FFO per share estimate for 2020 has been revised 2.5% upward to $3.72 in a month’s time. The stock has rallied 29.1% in 12 months’ time.

Highwoods Properties, Inc HIW Zacks Consensus Estimate for the current-year FFO per share has moved upward to $3.63 over the past month. Shares of this Zacks #2 Ranked company have gained 8.3% over the past year.

Piedmont Office Realty Trust, Inc. PDM also carries a Zacks Rank of 2, currently. The company’s ongoing-year FFO per share estimate moved upwards to $1.96 in a month’s time. The stock has rallied 12.4% in the past year.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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