American Tower Corporation’s AMT shares have declined nearly 4% in today’s trading session on a lower 2024 outlook.

Its third-quarter 2024 adjusted funds from operations (AFFO) per share, attributable to AMT common stockholders, of $2.64 beat the Zacks Consensus Estimate of $2.54 and climbed 2.3% year over year.

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Results reflect a year-over-year rise in revenues, aided by revenue growth across its service operations segment. American Tower recorded healthy year-over-year organic tenant billings growth of 5.2% and total tenant billings growth of 5.9%.

The company’s total revenues were $2.52 billion, missing the Zacks Consensus Estimate of $2.76 billion. However, the figure increased marginally from the prior-year quarter.

Per Steven Vondran, CEO of American Tower, “Adjusted for certain non-cash items in the quarter, including the loss taken upon closing our ATC India sale, our third quarter results continue to reflect the unabating demand for our global portfolio of communications infrastructure assets, underpinning the expectations we laid out at the start of the year. Carrier rollouts of 5G coverage are supporting robust activity levels in the U.S. and Europe, while emerging markets, particularly in Africa, are also seeing healthy pipelines of new business driven by network upgrades and coverage expansion.”

AMT’s Quarter in Detail

Adjusted EBITDA was $1.69 billion, down 0.9% from the prior-year period. The adjusted EBITDA margin was 66.9% in the quarter.

The company, through its subsidiary, ATC Asia Pacific Pte. Ltd., has reached agreements to sell its entire ownership stake in its subsidiaries located in Australia (“ATC Australia”) and New Zealand (“ATC New Zealand”). The total expected consideration for this sale is $78.2 million as of the signing dates, subject to certain adjustments. The operating results of both ATC Australia and ATC New Zealand are included in the Asia-Pacific property segment. It should be noted that these divestitures will not be classified as discontinued operations.

Property Operations of AMT

Revenues were $2.47 billion, down 1% on a year-over-year basis. Total operating profit was $1.72 billion, and the operating profit margin was 70%.

In the Property segment, revenues from the United States and Canada totaled $1.32 billion, down marginally year over year. Total international revenues amounted to $918 million, declining 4.3%. Newly formed Data Centers added $234 million to Property revenues, up 10.4% from the prior-year period.

AMT’s Service Operations

Revenues totaled $52.4 million in the reported quarter, up from $26.2 million in the prior-year quarter. The operating profit was $22 million, and the operating profit margin was 43% in the July-September quarter.

Cash Flow & Liquidity of AMT

In the third quarter, American Tower generated $1.47 billion of cash from operating activities, rising 13% year over year. Free cash flow in the period was $1.04 billion, jumping 16.2% from a year ago.

As of Sept. 30, 2024, the company had $10.9 billion in total liquidity. This comprised $2.2 billion in cash and cash equivalents and availability of $8.8 billion under its revolving credit facilities (net of any outstanding letters of credit).

AMT’s 2024 Guidance Lowered

American Tower anticipates total property revenues of $9,890 -$9,980 million, down from the earlier guided range of $11,100 -$11,280 million.

The adjusted EBITDA is revised to $6,770-$6,850 million, down from the prior projected range of $7,250-$7,360 million.

The AFFO attributable to AMT common stockholders is now expected to be in the band of $4,890-$4,970 million, down from the company’s prior expectations ranged from $4,905-$5,015 million.

AFFO per share is revised downward to $10.45-$10.62 from the prior projected range of $10.48-$10.72. The Zacks Consensus Estimate for the same is pegged at $10.49, which is within the company’s guided range.

It decreased the guidance for capital expenditure between $1,500-$1,610 million from the prior guided range of $1,600-$1,710 million.

Currently, AMT 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 Price, Consensus and EPS Surprise

American Tower Corporation price-consensus-eps-surprise-chart | American Tower Corporation Quote

Performance of Other REITs

Prologis, Inc. PLD reported third-quarter 2024 core funds from operations (FFO) per share of $1.43, outpacing the Zacks Consensus Estimate of $1.37. This compares favorably with the year-ago quarter’s figure of $1.30.

The quarterly results reflected a rise in rental revenues and healthy leasing activity. However, high interest expenses are an undermining factor. In addition, PLD increased its 2024 core FFO per share guidance range.

Crown Castle Inc. CCI reported third-quarter 2024 AFFO per share of $1.84, outpacing the Zacks Consensus Estimate of $1.80. The reported figure also increased by 4% from the year-ago quarter.

Results reflected a rise in site rental revenues and a decline in total operating expenses year over year. However, a decrease in services and other revenues affected the results to some extent. CCI maintained its outlook for 2024.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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