American Tower Corporation.
) started functioning as a Real Estate Investment trust (REIT) from
January 1, 2012, after completing the merger with its wholly owned
subsidiary American Tower REIT, Inc., on December 31, 2011.
The share holders of the parent company will automatically gain
control over American Tower REIT, Inc.'s stock. The stock of the
newly merged company will continue to trade on the New York Stock
Exchange under the same ticker symbol.
The main purpose of the company to covert itself into a REIT
will be beneficial for the company in terms of tax savings.
Following the conversion, American Tower will be required to pay
less tax as the company will distribute 90% of its earnings through
It all started on May 19, 2011, when the Board of Directors of
American Tower approved the commencement of the steps necessary to
reorganize the company to qualify as a REIT for tax purposes. On
November 29, 2011, AmericanTower received the stockholders approval
relating to the merger between AMT Tower business and American
Tower REIT, Inc.
In order to qualify as a REIT, American Tower made a special
distribution to stockholders of its undistributed earnings and
profits for an aggregate amount no more than $200 million. This
resulted in a payment of special dividend of 35 cents per share to
its shareholders on December 23, 2011.
American Tower announced mixed third quarter 2011 financial
results, where total revenue surpassed the Zacks Consensus Estimate
but EPS missed the same mainly due to unfavorable foreign exchange
fluctuation and higher operating expenses.
The company expects total revenue from the Rental &
Management segment in the range of $2,360 million - $2,390 million
in fiscal 2012, lower than the Zacks Consensus Estimate of $2,783
We believe that the wireless tower industry will continue to
outperform primarily on the back of huge demand for mobile data and
video services. So, in order to cash in on this lucrative
opportunity the company has acquired 2,500 towers from Telefónica's
Mexican subsidiary, Pegaso PCS, for $500 million. Moreover, the
recent Multi lease Agreement (
) signed with
Sprint Nextel Corp.
) will further boost the company's top-line growth going
Despite these positive sentiments, AmericanTower with its highly
leveraged balance sheet continues to face huge margin pressure.
Moreover, the recent development of satellite-delivered radio and
video services could reduce the need for tower-based broadcast
transmission going forward.
Currently,the companyhas a Zacks#3 Rank, implying a short-term
Boston, Massachusetts-based American Tower Corporation is a
leading independent operator of wireless communications towers in
the U.S., Brazil, Mexico, India, and Chile. American Tower leases
antenna space on its towers to wireless service providers as well
as to radio and television broadcast companies.
AMER TOWER CORP (
): Free Stock Analysis Report
SPRINT NEXTEL (
): Free Stock Analysis Report
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