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What's in Store for American Tower's (AMT) Q3 Earnings?

Zacks Equity Research

American Tower Corp. AMT is scheduled to release third-quarter 2019 results before the opening bell on Oct 31. The company’s results will likely reflect year-over-year (y/y) growth in revenues and funds from operations (FFO) per share.

In the last reported quarter, this wireless communications towers operator surpassed its adjusted funds from operations (AFFO) estimates by 4.15%. Results highlighted growth in revenues from the property segment as well improvement in adjusted EBITDA. Further, cash from operations for the June-end quarter improved year over year.

Over the trailing four quarters, the company surpassed estimates on three occasions and missed in the other. It delivered an average positive surprise of 2.27% during this period.

American Tower Corporation (REIT) Price and EPS Surprise
 

American Tower Corporation (REIT) Price and EPS Surprise


American Tower Corporation (REIT) price-eps-surprise | American Tower Corporation (REIT) Quote

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Amid increasing deployment of 5G by major mobile network carriers, American Tower has ramped up its investments in macro-tower constructions. This has strengthened the company’s core U.S. tower portfolio, and is expected to have helped it witness splendid leasing activity and organic tenant billings growth in the quarter under review. In fact, the Zacks Consensus Estimate for the property segment's third-quarter revenues is pinned at $1,825 million, indicating y/y growth of 4.2%. 

Further, long-term tower leases with major wireless carriers and recurring nature of revenues from leasing and management of such networks are expected to have continued, providing a stable revenue source to the company. In fact, the Zacks Consensus Estimate for third-quarter 2019 revenues is pegged at $1.86 billion, indicating y/y growth of around 4.1%.

Encouragingly, geographic revenues from the company’s international portfolio are anticipated to display 2.8% y/y growth to $816 million in the quarterly results.

However, the Indian carrier consolidation-driven churn might have unfavorably impacted the Asian property segment’s performance during the quarter under consideration. In fact, the Zacks Consensus Estimate for third-quarter revenues from Asian operations is projected to reflect a decline of 9.3%, year over year, to $293 million.

Lastly, American Tower’s activities during the quarter were inadequate to gain adequate analyst confidence. In fact, the Zacks Consensus Estimate for third-quarter FFO per share remained unchanged at $1.96, over the past month. Nonetheless, it represents y/y growth of 5.9%.

Earnings Whispers

Our proven model doesn’t conclusively predict a positive surprise in terms of FFO per share for American Tower this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. That is not the case here, as you will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: American Tower’s Earnings ESP is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank of 3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks That Warrant a Look

Digital Realty Trust, Inc. DLR, scheduled to release earnings on Oct 29, has an Earnings ESP of +2.61% and carries a Zacks Rank of 3, at present.

Senior Housing Properties Trust SNH, slated to report July-September quarter results on Nov 7, has an Earnings ESP of +3.23% and currently holds a Zacks Rank of 2.

Stag Industrial, Inc. STAG, set to release quarterly figures on Oct 30, has an Earnings ESP of +3.30% and carries a Zacks Rank of 3, at present.

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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American Tower Corporation (REIT) (AMT) : Free Stock Analysis Report
 
Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report
 
Senior Housing Properties Trust (SNH) : Free Stock Analysis Report
 
Stag Industrial, Inc. (STAG) : Free Stock Analysis Report
 
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