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SBA Communications (SBAC) Q1 AFFO & Revenues Top Estimates
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SBA Communications Corporation (SBAC - Free Report) delivered solid first-quarter 2020 results, wherein the bottom and top lines increased year over year, and surpassed the Zacks Consensus Estimate.
Adjusted funds from operations (AFFO) per share of $2.28 for the first quarter surpassed the Zacks Consensus Estimate of $2.26. The reported figure was also higher than the prior-year quarter’s $2.07.
Results reflected solid operating performance in its site leasing business. The company continues to benefit from the addition of sites to its portfolio. Demand in international markets also remained robust.
Quarterly total revenues increased 4.8% year over year to $517.07 million, outpacing the consensus estimate of $511.58 million. The upswing resulted from strong site-leasing business.
Quarter in Detail
Site-leasing revenues increased 8.9% year over year to $492.3 million. Domestic site-leasing revenues totaled $386.3 million. Domestic cash site-leasing revenues were $383.9 million, up 6.3% year over year. International site-leasing revenues were $106 million. International cash site-leasing revenues were $106.1 million, up 20.1% year over year. The segment’s operating profit was $396.6 million, marking an increase of 10.3% year over year. However, site development revenues declined around 40% to $24.7 million.
Overall operating income improved to $151.2 million from the year-ago quarter’s $139.3 million.
Adjusted EBITDA totaled $369.9 million, up 7.1% year over year, while adjusted EBITDA margin improved to 71.9% from the year-earlier quarter’s 70.4%.
During the March-end quarter, the company acquired 69 communication sites for a total cash consideration of $79.9 million. It also built 49 towers during this period. The company owned or operated 32,515 communication sites as of Mar 31, 2020. Of these, 16,463 sites are located in the United States and its territories, and 16,052 internationally.
SBA Communications also spent $6.9 million to purchase land and easements, and extend lease terms. Markedly, total cash capital expenditure was$128.8 million in the reported quarter, of which $9.2 million was non-discretionary and $119.6 million represented discretionary.
Cash Flow & Liquidity
During the first quarter of 2020, the company generated $277.7 million of net cash from operations compared with the year-ago quarter’s $222.7 million. As of Mar 31, 2020, it had $228 million in cash and equivalents, with $10.4 billion of net debt.
During the reported quarter, the company repurchased 0.8 million shares for $200 million, at an average price of $242.86 per share, under its $1-billion stock repurchase plan. As of the date of filing, it had $424.3 million of authorization remaining under the plan. Further, the company paid out a cash dividend of $52.2 million in first-quarter 2020.
Outlook
SBA Communications revised its guidance and now expects 2020 AFFO per share of $8.89-$9.29. The Zacks Consensus Estimate for the same is currently pinned at $9.33.
The company expects total revenues of $2,040-$2,080 million, of which site-leasing revenues are expected to be $1,930-$1,950 million, and site development revenues are likely to be between $110 million and $130 million. Moreover, adjusted EBITDA is projected between $1,464 million and $1,484 million.
Dividend Update
On May 5, SBA Communications announced a quarterly cash dividend of 46.5 cents on its Class A common stock. The dividend will be paid out on Jun 18 to shareholders of record as of the close of business on May 28, 2020.
SL Green Realty Corp. (SLG - Free Report) reported first-quarter 2020 FFO per share of $2.08, surpassing the Zacks Consensus Estimate of $1.70. The figure also compared favorably with the year-ago quarter’s $1.68.
Prologis, Inc. (PLD - Free Report) reported first-quarter 2020 core FFO per share of 83 cents, beating the Zacks Consensus Estimate of 81 cents. Results also compared favorably with the year-ago figure of 73 cents.
Vornado Realty Trust (VNO - Free Report) reported first-quarter 2020 FFO plus assumed conversions as adjusted of 72 cents per share, missing the Zacks Consensus Estimate of 76 cents. The reported figure declined 8.9% year over year.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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SBA Communications (SBAC) Q1 AFFO & Revenues Top Estimates
SBA Communications Corporation (SBAC - Free Report) delivered solid first-quarter 2020 results, wherein the bottom and top lines increased year over year, and surpassed the Zacks Consensus Estimate.
Adjusted funds from operations (AFFO) per share of $2.28 for the first quarter surpassed the Zacks Consensus Estimate of $2.26. The reported figure was also higher than the prior-year quarter’s $2.07.
Results reflected solid operating performance in its site leasing business. The company continues to benefit from the addition of sites to its portfolio. Demand in international markets also remained robust.
Quarterly total revenues increased 4.8% year over year to $517.07 million, outpacing the consensus estimate of $511.58 million. The upswing resulted from strong site-leasing business.
Quarter in Detail
Site-leasing revenues increased 8.9% year over year to $492.3 million. Domestic site-leasing revenues totaled $386.3 million. Domestic cash site-leasing revenues were $383.9 million, up 6.3% year over year. International site-leasing revenues were $106 million. International cash site-leasing revenues were $106.1 million, up 20.1% year over year. The segment’s operating profit was $396.6 million, marking an increase of 10.3% year over year. However, site development revenues declined around 40% to $24.7 million.
Overall operating income improved to $151.2 million from the year-ago quarter’s $139.3 million.
Adjusted EBITDA totaled $369.9 million, up 7.1% year over year, while adjusted EBITDA margin improved to 71.9% from the year-earlier quarter’s 70.4%.
During the March-end quarter, the company acquired 69 communication sites for a total cash consideration of $79.9 million. It also built 49 towers during this period. The company owned or operated 32,515 communication sites as of Mar 31, 2020. Of these, 16,463 sites are located in the United States and its territories, and 16,052 internationally.
SBA Communications also spent $6.9 million to purchase land and easements, and extend lease terms. Markedly, total cash capital expenditure was$128.8 million in the reported quarter, of which $9.2 million was non-discretionary and $119.6 million represented discretionary.
Cash Flow & Liquidity
During the first quarter of 2020, the company generated $277.7 million of net cash from operations compared with the year-ago quarter’s $222.7 million. As of Mar 31, 2020, it had $228 million in cash and equivalents, with $10.4 billion of net debt.
During the reported quarter, the company repurchased 0.8 million shares for $200 million, at an average price of $242.86 per share, under its $1-billion stock repurchase plan. As of the date of filing, it had $424.3 million of authorization remaining under the plan. Further, the company paid out a cash dividend of $52.2 million in first-quarter 2020.
Outlook
SBA Communications revised its guidance and now expects 2020 AFFO per share of $8.89-$9.29. The Zacks Consensus Estimate for the same is currently pinned at $9.33.
The company expects total revenues of $2,040-$2,080 million, of which site-leasing revenues are expected to be $1,930-$1,950 million, and site development revenues are likely to be between $110 million and $130 million. Moreover, adjusted EBITDA is projected between $1,464 million and $1,484 million.
Dividend Update
On May 5, SBA Communications announced a quarterly cash dividend of 46.5 cents on its Class A common stock. The dividend will be paid out on Jun 18 to shareholders of record as of the close of business on May 28, 2020.
SBA Communications currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SBA Communications Corporation Price, Consensus and EPS Surprise
SBA Communications Corporation price-consensus-eps-surprise-chart | SBA Communications Corporation Quote
Performance of Other REITs
SL Green Realty Corp. (SLG - Free Report) reported first-quarter 2020 FFO per share of $2.08, surpassing the Zacks Consensus Estimate of $1.70. The figure also compared favorably with the year-ago quarter’s $1.68.
Prologis, Inc. (PLD - Free Report) reported first-quarter 2020 core FFO per share of 83 cents, beating the Zacks Consensus Estimate of 81 cents. Results also compared favorably with the year-ago figure of 73 cents.
Vornado Realty Trust (VNO - Free Report) reported first-quarter 2020 FFO plus assumed conversions as adjusted of 72 cents per share, missing the Zacks Consensus Estimate of 76 cents. The reported figure declined 8.9% year over year.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>