American Tower Corp.
) is slated to release its second quarter 2012 results on
Wednesday, August 1, before the opening bell. The current Zacks
Consensus Estimate for the second quarter is pegged at 41 cents,
flat year over year.
With respect to earnings surprise, over the trailing four
quarters, AMT has outperformed the Zacks Consensus Estimate in
three of the last four quarters. The average earnings surprise was
a positive 3.65%, implying that the company has outdone the Zacks
Consensus Estimate by the same magnitude in three out of the last
On May 3, 2012, AMT declared its first quarter fiscal 2012
financial results that outdid the Zacks Consensus Estimates. On a
GAAP basis, first quarter net income was $221.3 million or 56 cents
per share compared with a net income of $91.8 million or 23 cents
per share in the prior-year quarter. Quarterly EPS of 56 cents was
well above the Zacks Consensus Estimate of 40 cents.
Total revenue increased 23.8% year over year to $696.5 million
and was above the Zacks Consensus Estimate of $671 million. The
solid top-line performance was driven by sustained growth in the
company's Rental and Management business segment.
Agreement of Estimate Revisions
In the last 30 days, out of the 18 analysts covering the stock,
three analysts increased their EPS estimates for the second quarter
2012, while three revised downward. Similarly, for the third
quarter of fiscal 2012, out of the 18 analysts covering the stock,
two analysts increased their EPS estimates and four revised them
For fiscal 2012, in the last 30 days, out of the 18 analysts
covering the stock, two analysts increased their EPS estimates,
while six moved it downwards. Again, for fiscal 2013, out of the 19
analysts covering the stock, two analysts increased its EPS
estimates while three moved in the opposite direction.
Magnitude of Estimate Revisions
Relative to these downward revisions of estimates, the Zacks
Consensus Estimate was flat, during the last 30 days, for the
second and third-quarter of 2012, at 41 cents and 42 cents,
respectively. The estimate for fiscal 2012 over the last 30 days
has changed by 2 cents to $1.79. However, the estimate for fiscal
2013 remained stable over the last 30 days.
The current Zacks Consensus Estimates for the ongoing quarter
contains 4.88% downside risk while for the upcoming quarter, it is
reflecting a 2.38% upside potential (essentially a proxy for future
Similarly, for fiscal 2012, the current Zacks Consensus
Estimates' contains an upside potential of 0.56%, while fiscal 2013
estimates contain a downside potential of 7.84%.
American Tower is expected to benefit from the surge in wireless
voice, broadband, data and video networks, which require more tower
space. Rapid expansion in emerging markets like Brazil and India
will provide long-term sustainable business opportunities for the
American Tower has a huge debt, which may hinder the company's
effort to access the debt market at favorable rates in order to
borrow and refinance its expansion plans. Recent development of
satellite-delivered radio and video services may reduce the need
for tower-based broadcast transmission.
Moreover, competition from other players like
Crown Castle International Corp.
SBA Communications Corp.
) will act as negative catalysts for the stock.
We thus maintain our long-term Neutral recommendation for AMT.
Currently, it has a Zacks #3 Rank, implying a short-term Hold
rating on the stock.
AMER TOWER CORP (AMT): Free Stock Analysis
CROWN CASTLE (CCI): Free Stock Analysis Report
SBA COMM CORP (SBAC): Free Stock Analysis
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