American Tower Hits New 52-Week High on Solid Q2 Results - Analyst Blog

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Shares of American Tower Corporation ( AMT ) touched a fresh 52-week high of $99.90 yesterday, before ending the session a trifle lower at $99.06. Notably, year to date, this leading wireless communication tower operator has gained nearly 25%.

The recent upside was propelled by solid second-quarter 2014 financial numbers. The company beat the Zacks Consensus Estimate for both earnings and revenues in the second quarter. Moreover, the company raised its revenue guidance for fiscal 2014 buoyed by rising 4GLTE deployment.

In the second quarter American Tower's earnings came in at 58 cents per share surpassing the Zacks Consensus Estimate of 52 cents by 11.5%. The company's earnings grew a whopping 132% on a year-over-year basis. Total revenue of $1,031.5 million increased 27.5% year over year and also steered ahead of the Zacks Consensus Estimate of $1,000 million.

Higher adoption of smartphones/tablets coupled with increased deployment of 3G/4G networks by carriers across the world continues to drive demand for tower space and in turn, drive the company's revenues higher.

In 2014, total revenue from the Rental & Management segment is expected to remain in the range of $3,945-$4,015 million, up from $3,895-$3,975 million estimated earlier. Net income is forecasted in the band of $830-$850 million.

Further, in a bid to expand its presence in Brazil, American Tower Corporation has decided to purchase Brazilian mobile-phone infrastructure firm BR Towers SA, which has further boosted investors' sentiments.

Post-closure of the deal, American Tower will own nearly 2,530 towers in Brazil and exclusive use rights for almost 2,110 towers in the country. The company expects that the acquisition of BR Towers SA's towers will generate nearly $131 million (around 292 million Brazilian Reais) in revenues annually.

American Tower currently has a Zacks Rank #3 (Hold).

Other Stocks to Consider

Some better-ranked stocks in this sector are Ashford Hospitality Trust, Inc. ( AHT ), Government Properties Income Trust ( GOV ) and Pebblebrook Hotel Trust ( PEB ). All the three stocks sport a Zacks Rank #1 (Strong Buy).

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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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