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SBA Communications (SBAC) Beats on Q1 FFO, Raises '23 View
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SBA Communications Corporation (SBAC - Free Report) reported first-quarter 2023 adjusted funds from operations (AFFO) per share of $3.13, outpacing the Zacks Consensus Estimate of $3.11. Moreover, the figure reflects a rise of 5.7% from the prior-year quarter.
SBAC’s site-leasing revenues improved year-over-year on healthy leasing activity amid elevated tower space demand. Moreover, it has continued to benefit from the addition of sites to its portfolio. The company also raised its 2023 outlook.
Quarterly total revenues increased 9% year over year to $675.5 million. The figure, however, missed the Zacks Consensus Estimate by just 0.1%.
Per Jeffrey Stoops, the president and CEO of the company, “We produced solid growth in Adjusted EBITDA and AFFO per share while operationally executing at a very high level. We are experiencing continued solid demand in substantially all of our markets. All of our US wireless carrier customers remain actively engaged in building out their 5G networks. Domestically and internationally, additional 5G network deployment from our customers is expected on our assets.”
Quarter in Detail
Site-leasing revenues were up 10.3% year over year to $617.3 million. This consisted of domestic site-leasing revenues of $454.8 million and international site-leasing revenues of $162.4 million. The domestic cash site-leasing revenues came in at $447.4 million, growing 5.6% year over year. International cash site leasing revenues came in at $163 million, jumping 27.4% year over year.
However, site-development revenues decreased 3.5% year over year to $58.2 million.
The site-leasing operating profit was $497.2 million, marking an increase of 9.9% year over year. Moreover, 97.2% of SBAC’s total operating profit in the quarter came from site leasing.
The overall operating income improved 3.4% to $224.1 million.
The adjusted EBITDA totaled $459.3 million, up 8.4%, while the adjusted EBITDA margin declined to 68.7% from 69.3% in the prior-year quarter.
Portfolio Activity
In the first quarter, SBAC acquired 14 communication sites for a total cash consideration of $8.6 million. The company also built 52 towers during this period. It owned or operated 39,362 communication sites as of Mar 31, 2023, of which 17,418 were in the United States and its territories and 21,944 internationally.
SBA Communications also spent $11.6 million to purchase land and easements and extend lease terms. Total cash capital expenditure was $69.1 million in the reported quarter, of which $57.3 million represented discretionary and $11.8 million was non-discretionary.
Subsequent to the quarter end, SBAC purchased or is under contract to buy 66 communication sites for a total consideration of $63.7 million in cash. It expects to complete the acquisition by the end of the fourth quarter of 2023.
Cash Flow & Liquidity
In the first quarter, SBA Communications generated nearly $311 million of net cash from operating activities compared with the year-ago quarter’s $292.5 million.
As of Mar 31, 2023, it had $152.8 million in cash and cash equivalents, up from $143.7 million recorded at the end of Dec 31, 2022. SBAC ended the quarter with a net debt-to-annualized adjusted EBITDA of 6.9X.
As of May 1, 2023, the company had $595 million outstanding under the $1.5 billion revolving credit facility.
During the first quarter of 2023, SBAC did not repurchase any shares of its Class A common stock. As of May 1, 2023, it had $504.7 million of authorization remaining under its approved repurchase plan.
Dividend Update
Concurrent with the earnings release, SBAC announced a cash dividend of 85 cents on its Class A common stock. The dividend will be paid out on Jun 21 to shareholders of record as of May 26, 2023.
2023 Guidance Raised
SBAC now expects AFFO per share in the range of $12.55-$12.91, up from the prior guided range of $12.46-$12.83. The Zacks Consensus Estimate for the same is currently pegged at $12.62, which is within the guided range.
Site-leasing revenues are now projected to be $2,481-$2,501 million, revised upward from $2,469-$2,489 million guided earlier. Site-development revenue guidance remains unchanged between $205 million and $225 million.
Further, the adjusted EBITDA has been raised from $1,845-$1,865 million to $1,855-$1,875 million.
Crown Castle Inc. (CCI - Free Report) reported first-quarter 2023 adjusted FFO (AFFO) per share of $1.91, lagging the Zacks Consensus Estimate of $1.94. The figure, however, compared favorably with the year-ago period’s $1.87. Our estimate for the same was pegged at $1.98.
Higher operating expenses in the quarter were a deterrent. Nonetheless, the rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. The company maintained its outlook for 2023.
Digital Realty Trust (DLR - Free Report) reported first-quarter 2023 core FFO per share of $1.66, beating the Zacks Consensus Estimate by a whisker. The figure, however, fell short of the year-ago quarter’s $1.67.
The company experienced year-over-year growth in operating revenues during the quarter. However, rising rental property operating expenses acted as a dampener. DLR maintained its guidance for 2023 core FFO per share but lowered its expectations for full-year revenues.
American Tower Corporation (AMT - Free Report) reported first-quarter 2023 AFFO per share, attributable to AMT common stockholders, of $2.54, beating the Zacks Consensus Estimate of $2.38. The figure also surpassed our estimate of $2.44.
Results reflect improving revenues across its property segment. American Tower recorded healthy year-over-year organic tenant billings growth of 6.4% and total tenant billings growth of 7.3%. It also revised its 2023 outlook.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
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SBA Communications (SBAC) Beats on Q1 FFO, Raises '23 View
SBA Communications Corporation (SBAC - Free Report) reported first-quarter 2023 adjusted funds from operations (AFFO) per share of $3.13, outpacing the Zacks Consensus Estimate of $3.11. Moreover, the figure reflects a rise of 5.7% from the prior-year quarter.
SBAC’s site-leasing revenues improved year-over-year on healthy leasing activity amid elevated tower space demand. Moreover, it has continued to benefit from the addition of sites to its portfolio. The company also raised its 2023 outlook.
Quarterly total revenues increased 9% year over year to $675.5 million. The figure, however, missed the Zacks Consensus Estimate by just 0.1%.
Per Jeffrey Stoops, the president and CEO of the company, “We produced solid growth in Adjusted EBITDA and AFFO per share while operationally executing at a very high level. We are experiencing continued solid demand in substantially all of our markets. All of our US wireless carrier customers remain actively engaged in building out their 5G networks. Domestically and internationally, additional 5G network deployment from our customers is expected on our assets.”
Quarter in Detail
Site-leasing revenues were up 10.3% year over year to $617.3 million. This consisted of domestic site-leasing revenues of $454.8 million and international site-leasing revenues of $162.4 million. The domestic cash site-leasing revenues came in at $447.4 million, growing 5.6% year over year. International cash site leasing revenues came in at $163 million, jumping 27.4% year over year.
However, site-development revenues decreased 3.5% year over year to $58.2 million.
The site-leasing operating profit was $497.2 million, marking an increase of 9.9% year over year. Moreover, 97.2% of SBAC’s total operating profit in the quarter came from site leasing.
The overall operating income improved 3.4% to $224.1 million.
The adjusted EBITDA totaled $459.3 million, up 8.4%, while the adjusted EBITDA margin declined to 68.7% from 69.3% in the prior-year quarter.
Portfolio Activity
In the first quarter, SBAC acquired 14 communication sites for a total cash consideration of $8.6 million. The company also built 52 towers during this period. It owned or operated 39,362 communication sites as of Mar 31, 2023, of which 17,418 were in the United States and its territories and 21,944 internationally.
SBA Communications also spent $11.6 million to purchase land and easements and extend lease terms. Total cash capital expenditure was $69.1 million in the reported quarter, of which $57.3 million represented discretionary and $11.8 million was non-discretionary.
Subsequent to the quarter end, SBAC purchased or is under contract to buy 66 communication sites for a total consideration of $63.7 million in cash. It expects to complete the acquisition by the end of the fourth quarter of 2023.
Cash Flow & Liquidity
In the first quarter, SBA Communications generated nearly $311 million of net cash from operating activities compared with the year-ago quarter’s $292.5 million.
As of Mar 31, 2023, it had $152.8 million in cash and cash equivalents, up from $143.7 million recorded at the end of Dec 31, 2022. SBAC ended the quarter with a net debt-to-annualized adjusted EBITDA of 6.9X.
As of May 1, 2023, the company had $595 million outstanding under the $1.5 billion revolving credit facility.
During the first quarter of 2023, SBAC did not repurchase any shares of its Class A common stock. As of May 1, 2023, it had $504.7 million of authorization remaining under its approved repurchase plan.
Dividend Update
Concurrent with the earnings release, SBAC announced a cash dividend of 85 cents on its Class A common stock. The dividend will be paid out on Jun 21 to shareholders of record as of May 26, 2023.
2023 Guidance Raised
SBAC now expects AFFO per share in the range of $12.55-$12.91, up from the prior guided range of $12.46-$12.83. The Zacks Consensus Estimate for the same is currently pegged at $12.62, which is within the guided range.
Site-leasing revenues are now projected to be $2,481-$2,501 million, revised upward from $2,469-$2,489 million guided earlier. Site-development revenue guidance remains unchanged between $205 million and $225 million.
Further, the adjusted EBITDA has been raised from $1,845-$1,865 million to $1,855-$1,875 million.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SBA Communications Corporation Price, Consensus and EPS Surprise
SBA Communications Corporation price-consensus-eps-surprise-chart | SBA Communications Corporation Quote
Performance of Other REITs
Crown Castle Inc. (CCI - Free Report) reported first-quarter 2023 adjusted FFO (AFFO) per share of $1.91, lagging the Zacks Consensus Estimate of $1.94. The figure, however, compared favorably with the year-ago period’s $1.87. Our estimate for the same was pegged at $1.98.
Higher operating expenses in the quarter were a deterrent. Nonetheless, the rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. The company maintained its outlook for 2023.
Digital Realty Trust (DLR - Free Report) reported first-quarter 2023 core FFO per share of $1.66, beating the Zacks Consensus Estimate by a whisker. The figure, however, fell short of the year-ago quarter’s $1.67.
The company experienced year-over-year growth in operating revenues during the quarter. However, rising rental property operating expenses acted as a dampener. DLR maintained its guidance for 2023 core FFO per share but lowered its expectations for full-year revenues.
American Tower Corporation (AMT - Free Report) reported first-quarter 2023 AFFO per share, attributable to AMT common stockholders, of $2.54, beating the Zacks Consensus Estimate of $2.38. The figure also surpassed our estimate of $2.44.
Results reflect improving revenues across its property segment. American Tower recorded healthy year-over-year organic tenant billings growth of 6.4% and total tenant billings growth of 7.3%. It also revised its 2023 outlook.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.