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SBA Communications (SBAC) Tops on Q1 AFFO, Ups '21 Guidance
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SBA Communications Corporation (SBAC - Free Report) delivered solid first-quarter 2021 results, wherein adjusted funds from operations (AFFO) and the top line increased year over year and surpassed the Zacks Consensus Estimate.
The AFFO per share of $2.58 for the first quarter surpassed the Zacks Consensus Estimate of $2.45. Further, the reported figure is 13.2% higher than the prior-year quarter’s $2.28.
Results reflected solid operating performance in both its site-leasing and development business. The company continues to benefit from the addition of sites to its portfolio.
Quarterly total revenues increased 6.1% year over year to $548.74 million and outpaced the consensus estimate of $535.8 million.
Subsequent to the first-quarter end, the company inked a global leasing agreement with Verizon, making it a key partner for the carrier’s deployment of their new C-Band spectrum. This will aid the build-out of Verizon’s nationwide 5G network. Moreover, the lease extends the committed terms under SBA Communications’ existing lease agreements with Verizon.
Per management, “with the completion of the C-Band spectrum auction during the first quarter and the stated network plans of our largest customers, we had a very strong first quarter in our services business, while seeing substantial growth in our backlog of both services business and new lease and amendment applications. This increasing activity level has allowed us to increase our 2021 full year services outlook and gives us tremendous confidence in increased organic leasing growth over the next couple of years.”
Quarter in Detail
Site-leasing revenues were up 2.6% year over year to $505.1 million. This consisted of domestic site-leasing revenues of $403.6 million and international site-leasing revenues of $101.5 million. Domestic cash site-leasing revenues were $402.2 million, while international cash site-leasing revenues were $102.3 million. Site-leasing operating profit summed $409.7 million, marking an increase of 3.3% year over year.
Also, site-development revenues jumped 76.6% year over year to $43.6 million.
Overall operating income improved to $173.6 million from the year-ago quarter’s $151.2 million.
Adjusted EBITDA totaled $390.1 million, up 5.4% year over year, while adjusted EBITDA margin declined to 71.2% from the year-ago figure of 71.9%.
In the March-end quarter, the company acquired 731 communication sites, including wireless tenant licenses on 697 utility transmission structures, for cash consideration of $975.5 million. It also built 62 towers during this period. The company owned or operated 33,711 communication sites as of Mar 31, 2021. Of these, 17,259 sites are located in the United States and its territories, and 16,452 internationally.
SBA Communications also spent $6.5 million to purchase land and easements, and extend lease terms. Markedly, total cash capital expenditure was $1.1 billion in the reported quarter, of which $8.2 million was non-discretionary and $1.1 billion represented discretionary.
Cash Flow & Liquidity
In the first quarter of 2021, SBA Communications generated $285.5 million of net cash from operations compared with the year-ago quarter’s $277.7 million. As of Mar 31, 2021, it had $176.6 million in cash and equivalents, with $11.9 billion of net debt.
The company repurchased 0.7 million shares of its Class A common stock for $168.9 million at an average price per share of $258.33 under its $1-billion repurchase plan.
Further, it paid out a cash dividend of $63.4 million in first-quarter 2021.
Outlook
SBA Communications has hiked the guidance for 2021 and expects 2021 AFFO per share of $10.15-$10.57. The Zacks Consensus Estimate for the same is pegged at 10.20.
Site-leasing revenues are projected to be $2,065-$2,085 million, and site-development revenues are expected to be between $155 million and $175 million. Moreover, adjusted EBITDA is predicted between $1,573 million and $1,593 million.
Dividend Update
On Apr 26, SBA Communications announced a quarterly cash dividend of 58 cents on its Class A common stock. The dividend will be paid out on Jun 15 to shareholders of record as of the close of business on May 20, 2021.
SBA Communications Corporation Price, Consensus and EPS Surprise
We now look forward to the earnings releases of other REITs like Digital Realty Trust, Inc. (DLR - Free Report) , Cousins Properties (CUZ - Free Report) and CubeSmart (CUBE - Free Report) . All three companies are slated to report first-quarter earnings on Apr 29.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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SBA Communications (SBAC) Tops on Q1 AFFO, Ups '21 Guidance
SBA Communications Corporation (SBAC - Free Report) delivered solid first-quarter 2021 results, wherein adjusted funds from operations (AFFO) and the top line increased year over year and surpassed the Zacks Consensus Estimate.
The AFFO per share of $2.58 for the first quarter surpassed the Zacks Consensus Estimate of $2.45. Further, the reported figure is 13.2% higher than the prior-year quarter’s $2.28.
Results reflected solid operating performance in both its site-leasing and development business. The company continues to benefit from the addition of sites to its portfolio.
Quarterly total revenues increased 6.1% year over year to $548.74 million and outpaced the consensus estimate of $535.8 million.
Subsequent to the first-quarter end, the company inked a global leasing agreement with Verizon, making it a key partner for the carrier’s deployment of their new C-Band spectrum. This will aid the build-out of Verizon’s nationwide 5G network. Moreover, the lease extends the committed terms under SBA Communications’ existing lease agreements with Verizon.
Per management, “with the completion of the C-Band spectrum auction during the first quarter and the stated network plans of our largest customers, we had a very strong first quarter in our services business, while seeing substantial growth in our backlog of both services business and new lease and amendment applications. This increasing activity level has allowed us to increase our 2021 full year services outlook and gives us tremendous confidence in increased organic leasing growth over the next couple of years.”
Quarter in Detail
Site-leasing revenues were up 2.6% year over year to $505.1 million. This consisted of domestic site-leasing revenues of $403.6 million and international site-leasing revenues of $101.5 million. Domestic cash site-leasing revenues were $402.2 million, while international cash site-leasing revenues were $102.3 million. Site-leasing operating profit summed $409.7 million, marking an increase of 3.3% year over year.
Also, site-development revenues jumped 76.6% year over year to $43.6 million.
Overall operating income improved to $173.6 million from the year-ago quarter’s $151.2 million.
Adjusted EBITDA totaled $390.1 million, up 5.4% year over year, while adjusted EBITDA margin declined to 71.2% from the year-ago figure of 71.9%.
In the March-end quarter, the company acquired 731 communication sites, including wireless tenant licenses on 697 utility transmission structures, for cash consideration of $975.5 million. It also built 62 towers during this period. The company owned or operated 33,711 communication sites as of Mar 31, 2021. Of these, 17,259 sites are located in the United States and its territories, and 16,452 internationally.
SBA Communications also spent $6.5 million to purchase land and easements, and extend lease terms. Markedly, total cash capital expenditure was $1.1 billion in the reported quarter, of which $8.2 million was non-discretionary and $1.1 billion represented discretionary.
Cash Flow & Liquidity
In the first quarter of 2021, SBA Communications generated $285.5 million of net cash from operations compared with the year-ago quarter’s $277.7 million. As of Mar 31, 2021, it had $176.6 million in cash and equivalents, with $11.9 billion of net debt.
The company repurchased 0.7 million shares of its Class A common stock for $168.9 million at an average price per share of $258.33 under its $1-billion repurchase plan.
Further, it paid out a cash dividend of $63.4 million in first-quarter 2021.
Outlook
SBA Communications has hiked the guidance for 2021 and expects 2021 AFFO per share of $10.15-$10.57. The Zacks Consensus Estimate for the same is pegged at 10.20.
Site-leasing revenues are projected to be $2,065-$2,085 million, and site-development revenues are expected to be between $155 million and $175 million. Moreover, adjusted EBITDA is predicted between $1,573 million and $1,593 million.
Dividend Update
On Apr 26, SBA Communications announced a quarterly cash dividend of 58 cents on its Class A common stock. The dividend will be paid out on Jun 15 to shareholders of record as of the close of business on May 20, 2021.
SBA Communications Corporation Price, Consensus and EPS Surprise
SBA Communications Corporation price-consensus-eps-surprise-chart | SBA Communications Corporation Quote
SBA Communications currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We now look forward to the earnings releases of other REITs like Digital Realty Trust, Inc. (DLR - Free Report) , Cousins Properties (CUZ - Free Report) and CubeSmart (CUBE - Free Report) . All three companies are slated to report first-quarter earnings on Apr 29.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%.
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>