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What's in Store for SBA Communications (SBAC) in Q2 Earnings?
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SBA Communications Corporation (SBAC - Free Report) is scheduled to report second-quarter 2024 results on Jul 29, after market close. While the company’s quarterly results may display a decline in revenues year over year, adjusted funds from operations (AFFO) per share are expected to grow.
In the last reported quarter, this Boca Raton, FL-based communications tower REIT reported AFFO per share of $3.29, missing the Zacks Consensus Estimates by a cent. Results were affected by lower site development revenues. However, SBAC witnessed an improvement in site leasing revenues, which supported the results to some extent.
Over the preceding four quarters, SBAC’s AFFO per share surpassed the Zacks Consensus Estimate on three occasions and missed in the remaining period, the average beat being 1.95%. The graph below depicts this surprise history:
SBA Communications Corporation Price and EPS Surprise
During the second quarter, SBA Communications is likely to have benefited from the secular growth trends of the wireless industry. With, the advancement in mobile technology, such as 4G and 5G networks, and the proliferation of bandwidth-intensive applications, mobile data usage has increased significantly globally.
Moreover, SBAC’s long-term (typically five to 10 years) tower leases with wireless service providers that have built-in rent escalators are likely to have supported stable site-leasing revenues for the company in the quarter, boosting its top line.
SBAC’s healthy balance sheet position is expected to have supported its investments in the existing 4G networks and efforts for 5G deployment. Also, asset-base expansion through acquisitions and development activities is likely to have given it an edge.
The Zacks Consensus Estimate for second-quarter site-leasing revenues, which account for the lion’s share of total revenues, is pegged at $632.5 million, indicating an increase from the year-ago quarter’s $626.1 million.
However, site-development revenues are expected to be on the lower side in the second quarter due to an anticipated decrease in carrier activities. The consensus mark stands at $35.1 million, implying a decline from $52.4 million reported in the year-ago period.
The Zacks Consensus Estimate for total quarterly revenues is pegged at $664.5 million, indicating a year-over-year decline of 2.1%.
High interest rates and elevated churn in certain markets where the company operates might have been a deterrent for SBAC’s quarterly performance to some extent.
The company’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has remained unrevised at $3.28 over the past month. However, the figure implies year-over-year growth of 1.2%.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict a surprise in terms of AFFO per share for SBA Communications this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is not the case here.
SBA Communications currently has an Earnings ESP of 0.00% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
A Stock That Warrants a Look
Here is one stock from the broader REIT sector — American Tower (AMT - Free Report) — you may want to consider, as our model shows that it has the right combination of elements to report a surprise this quarter.
Crown Castle Inc. (CCI - Free Report) reported second-quarter 2024 AFFO per share of $1.62, lagging the Zacks Consensus Estimate of $1.65. The reported figure also declined 21% from the year-ago quarter.
Results reflected a fall in net revenues on a year-over-year basis. Higher interest expense on debt obligations and lower contributions from adjusted EBITDA were undermining factors.
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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What's in Store for SBA Communications (SBAC) in Q2 Earnings?
SBA Communications Corporation (SBAC - Free Report) is scheduled to report second-quarter 2024 results on Jul 29, after market close. While the company’s quarterly results may display a decline in revenues year over year, adjusted funds from operations (AFFO) per share are expected to grow.
In the last reported quarter, this Boca Raton, FL-based communications tower REIT reported AFFO per share of $3.29, missing the Zacks Consensus Estimates by a cent. Results were affected by lower site development revenues. However, SBAC witnessed an improvement in site leasing revenues, which supported the results to some extent.
Over the preceding four quarters, SBAC’s AFFO per share surpassed the Zacks Consensus Estimate on three occasions and missed in the remaining period, the average beat being 1.95%. The graph below depicts this surprise history:
SBA Communications Corporation Price and EPS Surprise
SBA Communications Corporation price-eps-surprise | SBA Communications Corporation Quote
Factors at Play
During the second quarter, SBA Communications is likely to have benefited from the secular growth trends of the wireless industry. With, the advancement in mobile technology, such as 4G and 5G networks, and the proliferation of bandwidth-intensive applications, mobile data usage has increased significantly globally.
Moreover, SBAC’s long-term (typically five to 10 years) tower leases with wireless service providers that have built-in rent escalators are likely to have supported stable site-leasing revenues for the company in the quarter, boosting its top line.
SBAC’s healthy balance sheet position is expected to have supported its investments in the existing 4G networks and efforts for 5G deployment. Also, asset-base expansion through acquisitions and development activities is likely to have given it an edge.
The Zacks Consensus Estimate for second-quarter site-leasing revenues, which account for the lion’s share of total revenues, is pegged at $632.5 million, indicating an increase from the year-ago quarter’s $626.1 million.
However, site-development revenues are expected to be on the lower side in the second quarter due to an anticipated decrease in carrier activities. The consensus mark stands at $35.1 million, implying a decline from $52.4 million reported in the year-ago period.
The Zacks Consensus Estimate for total quarterly revenues is pegged at $664.5 million, indicating a year-over-year decline of 2.1%.
High interest rates and elevated churn in certain markets where the company operates might have been a deterrent for SBAC’s quarterly performance to some extent.
The company’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has remained unrevised at $3.28 over the past month. However, the figure implies year-over-year growth of 1.2%.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict a surprise in terms of AFFO per share for SBA Communications this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is not the case here.
SBA Communications currently has an Earnings ESP of 0.00% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
A Stock That Warrants a Look
Here is one stock from the broader REIT sector — American Tower (AMT - Free Report) — you may want to consider, as our model shows that it has the right combination of elements to report a surprise this quarter.
American Tower, scheduled to report quarterly numbers on Jul 30, has an Earnings ESP of +0.71% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Performance of Another REIT
Crown Castle Inc. (CCI - Free Report) reported second-quarter 2024 AFFO per share of $1.62, lagging the Zacks Consensus Estimate of $1.65. The reported figure also declined 21% from the year-ago quarter.
Results reflected a fall in net revenues on a year-over-year basis. Higher interest expense on debt obligations and lower contributions from adjusted EBITDA were undermining factors.
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.