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American Tower (AMT) Beats Q3 FFO Estimates, Updates View

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American TowerAMT reported solid results for the third quarter of 2018, wherein adjusted funds from operations (AFFO) and revenues surpassed the Zacks Consensus Estimates.

Consolidated AFFO came in at $821 million compared with $748 million reported in the year-ago quarter. The AFFO per share came in at $1.85, beating the Zacks Consensus Estimate of $1.82. Further, this compares favorably to AFFO of $1.73 per share reported in the last year.

The company posted total revenues of $1.79 billion, beating the Zacks Consensus Estimate of $1.77 billion. The figure improved 6.2% year over year.

Operating Metrics

Adjusted EBITDA in the reported quarter was $1,095 million, up 5.3% from the prior-year quarter. Adjusted EBITDA margin was 61.3% in the third quarter. Selling, general, administrative and development expenses totaled $177.9 million compared with $148 million incurred in the year-earlier quarter. Operating income was $567.2 million compared with $561.1 million reported in the year-ago quarter.

Cash Flow and Liquidity

In the third quarter of 2018, American Tower generated $753 million of cash from operations, up 15.3% year over year. Free cash flow in the quarter was $561 million, up 21.3% year over year.

At the end of the reported quarter, the company had $1,027 million in cash and cash equivalents, and around $18,423 million of outstanding long-term debt compared with $802.1 million and $19,430.3 million, respectively, witnessed at the end of December 2017.

Property Segment

Quarterly revenues grossed $1,785 million, up 6.2% year over year. Operating profit was $1,122 million and operating profit margin was 64% during the Jul-Sep period.

In the Property segment, revenues from the United States totaled $958 million, up 5.9% year over year. Total international revenues amounted to $794 million, up 7.1% year over year. Within this, revenues from Asia totaled $323 million, up 8.6% year over year. EMEA revenues grossed $167 million, up 7.1% year over year. Latin America revenues totaled $304 million, up 2% year over year.

Services Segment

Quarterly revenues totaled $34 million, up 34% year over year. Operating profit was $14 million and operating profit margin was 42% in the quarter under review.

Outlook for 2018

For 2018, American Tower anticipates property revenues of $7,200-$7,260 million, reflecting growth of 10.1% at the mid-point. Net income is expected between $1,285 million and $1,315 million, marking growth of 6.1% at the mid-point. Adjusted EBITDA is projected at $4,580-$4,620 million, indicating mid-point growth of 12.5%. Consolidated AFFO is estimated in the range of $3,470-$3,500 million, reflecting mid-point growth of 20.1%.

Currently, American Tower carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

American Tower Corporation (REIT) Price and EPS Surprise

American Tower Corporation (REIT) Price and EPS Surprise | American Tower Corporation (REIT) Quote

We now look forward to the earnings releases of other REITs like The Macerich Company MAC , Federal Realty Trust FRT and Mark Cali Realty CLI . All three companies are scheduled to report their Q3 numbers on Oct 31.

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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