American Tower Corp. Beats the Street, Slashes Sales Guidance

By Markets Fool.com

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This former Verizon site in Odessa, Fla., is now an American Tower asset. Image source: author.

This morning, American Tower reported results for the first quarter of 2015. The owner and operator of wireless tower structures around the world beat analyst expectations on both the top and bottom lines.

American Tower reported a 17% year-over-year increase to its adjusted funds from operations, landing at $514 million. The metric, often shortened to AFFO, works as an adjusted earnings figure for real estate investment trusts such as American Tower, and is the figure to look for when comparing the company's earnings to analyst estimates. AFFO per share rose 14% to $1.25, leaving the Wall Street consensus of $1.16 per share far behind.

Total revenue grew 9.7% to $1.08 billion, just above the $1.07 billion analyst target. Sales rose 12.9% in the domestic market but just 6.2% in the international segment.

The American results include a tiny contribution from the acquisition of 11,400 Verizon towers, which closed a couple days before the end of the reported quarter. Another 4,200 TIM Brazil sites were added at the start of the second quarter.

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All told, the company now manages about 79,400 sites across the Americas, Europe, Africa, and India. Sixty-four percent of these towers stand outside U.S. borders.

Currency exchange effects resulting from the rising value of the U.S. dollar caused American Tower to reduce its rental and management revenue outlook by 6% for the full year. The same currency issues also dragged guidance for full-year adjusted EBITDA profit down by 6%, and AFFO results down by 8%.

The pending buyout of 4,800 Airtel Nigeria towers should balance out most of these currency effects, but are not included in management's current outlook. Acquisitions are a key component of American Tower's growth strategy, and will account for most of the company's core growth in 2015.

American Tower CEO Jim Taiclet waxed poetic about the impact of the Verizon, TIM Brazil, and Airtel Nigeria transactions. "These three portfolios solidify our strategic positioning in the most populous countries in North America, South America and EMEA, respectively, securing our ability to benefit from their vibrant wireless markets far into the future," Taiclet said in a press release.

The article American Tower Corp. Beats the Street, Slashes Sales Guidance originally appeared on Fool.com.

Anders Bylund owns shares of American Tower. The Motley Fool recommends American Tower and Verizon Communications. The Motley Fool owns shares of American Tower and has the following options: long January 2017 $80 calls on American Tower. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.