SBA’s Q2 2018 “In Line” With Analysts

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SBA Communications Corporation (SBAC) late yesterday reported results for the quarter ended June 30, 2018.

“We continued our strong operational performance in the second quarter,” commented Jeffrey A. Stoops, President and Chief Executive Officer. “Adjusting for currency, leasing revenue, tower cash flow and Adjusted EBITDA were all ahead of our expectations for the quarter, evidencing the underlying strength in our business. In the U.S., the four major wireless service providers are all active investing in their networks, and our leasing and services backlogs continue to grow.” SBA bought 224 towers during the second quarter, according to the report.  This gives them 28,604 communication sites,16,239 of which are located in the United States and its territories, and 12,365 of which are located internationally.

Analyst Amir Rozwadowski with Barclays saw the results as “in-line while 2018 guidance included some minor downward revisions largely due to unfavorable fx movements.” Rozwadowski pointed out for 2Q18, SBA’s leasing revenues of $429.9M were in line with their $430.0M estimate while site development revenues of $26.4M were above their $26.1M expectation.

“Adjusted EBITDA of $318.9M was 1.2% above our $315.0M estimate,” he said, “while AFFO per share of $1.83 was $0.03 below our $1.86 estimate.”  The company repurchased $306.9M of common stock during the quarter at an average price per share of $163.44 (equating to 1.9 million shares being retired during the quarter), which was significantly more than the $38.5M (0.2 million shares) repurchased during Q1. “As of today,” Rozwadowski said “the company has $655M of authorization remaining under its current $1B stock repurchase plan.”

CEO Stoops said demand in their international markets remained solid, particularly in Brazil. “Against this favorable demand environment, we continue to execute very well and continue to post the highest tower cash flow and adjusted EBITDA margins in our industry,” he said. “We continued, and expect to continue, to allocate capital to a mix of portfolio growth and stock repurchases such as to maintain a target leverage rate of 7.0x to 7.5x net debt/adjusted EBITDA to maximize long-term growth in AFFO per share. We look forward to a busy and productive second half of 2018, which we expect to continue into 2019.”

To see the full Q2 2018 statement, click here.

July 31, 2018         

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