American Tower Reports Q1 Results: “Mixed” Say Analysts


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American Tower Corporation (NYSE: AMT) Friday reported financial results for the quarter ended March 31, 2019. Jim Taiclet, American Tower’s Chief Executive Officer, said, “We began 2019 with a solid quarter of results, highlighted by strong global leasing activity, 8.2% Organic Tenant Billings Growth in the U.S., the construction of more than 700 new sites and a 20% dividend increase.”

Taiclet said they remain focused on, “driving operational excellence, prudently deploying capital and leveraging our innovation program to capitalize on exciting future opportunities as wireless networks continue to advance. 

He said with their portfolio of more than 170,000 towers, small cell systems and other communications real estate, he believes they are well positioned to take advantage of the global demand trends in mobile “to continue driving attractive growth and returns for years to come.” 

Jennifer Fritzsche, Senior Analyst with Wells Fargo Securities said AMT reported mixed Q1 2019 results as revenue was light of their estimates (in-line with Street), but both EBITDA and AFFO beat them.  

“The company continues to work through India consolidation churn, which weighs on the overall business, though management expects Q1 to be the low water mark in terms of churn,” Fritzsche said. “Offsetting India churn was record highs in new leasing activity domestically, resulting in organic growth of 8.2%, the highest y/y growth number we have seen since Q1 2015.” She said the company expects 85-90% of 2019 domestic activity to come from the Big 4 wireless carriers, and looks for the mix of activity to remain steady at 80/20 amendments to new leasing.

“We were admittedly a little surprised to see the shares trade up in line with the market (+0.58% vs. S&P 500 +0.73%) given the lack of 2019 guide increase, and believe investors must view the Q1 in-line print and reiterate 2019 guide as “good enough,” she said. “We remain on the sidelines with a Market Perform rating and believe shares are fairly valued at current levels.”

Results beat estimates, driven by higher than expected organic growth both domestically and internationally, according to Spencer Kurn of new street research.  “Guidance across the major financial metrics was left largely unchanged as the stronger organic trends were offset by FX headwinds; however, excluding FX, guidance would have increased by 30-40bps. Organic growth in the U.S. continues to accelerate off of an already elevated base, and churn in India finally appears to be bottoming.  We think these trends will be viewed favorably by the market, but we remain Neutral on AMT due to valuation. We would rather own SBAC, who has less exposure to troubled international markets, has faster AFFO per share growth, and trades at a discount,” Kurn said.

May 6, 2019

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