American Tower (AMT), Q4 Revenues Surpass and FFO

American Tower (AMT), which had quarterly funds from operations (FFO), of $2.34 per shares, beat the Zacks Consensus estimate of $2.23 per shared. This compares with FFO of $2.18 a year earlier. These figures have been adjusted for non-recurring expenses.

FFO surprised by 4.93% in this quarter’s quarterly report It was expected that the wireless communications infrastructure company would report FFO of 2.42 per share a quarter ago. However, FFO actually reached $2.36 per share, which is a surprise at -2.48%.

The company has exceeded consensus FFO estimates three more times in the past four quarters.

American Tower, which is part of the Zacks REIT and Equity Trust-Other industry, reported revenues of $2.71 Billion for the quarter ending December 2022. This was 0.98% more than the Zacks Consensus estimate. This compares with the year-ago revenues which were $2.45 trillion. In the four most recent quarters, consensus revenue estimates have been exceeded four times.

The stock’s sustainability will be determined primarily by the commentary of management on the earnings conference.

American Tower shares have lost about 5.9% since the beginning of the year versus the S&P 500’s gain of 4%.

What’s next for American Tower?

Although American Tower’s performance has been below the market’s so far this year the question investors are asking is: What’s the next step for the stock?

Although there aren’t easy answers to this question, one reliable indicator that investors can use is the company’s FFO outlook. This will include the current consensus FFO forecasts for the upcoming quarter(s), as well as any recent changes.

Empirical research has shown a strong correlation between near term stock movements and trends of estimate revisions. Investors have two options: track these revisions on their own or rely upon a proven rating tool such as the Zacks Rank. This tool has a strong track record in harnessing the power estimate revisions.

The trend in estimate revisions for American Tower is mixed ahead of the earnings release. The company’s earnings report is expected to change the direction and magnitude of the estimate revisions. However, the current Zacks rank for American Tower is #3 (Hold). In the short term, the stock is expected to perform in line the market. The complete Zacks #1 Rank (Strong buy) stock list can be found here.

It will be interesting, in the days to come, to see how estimates change for the next quarters as well as the current fiscal years. The consensus FFO estimate for the current quarter is $2.45 based on $2.75B in revenues and $10.01 based on $11.09B in revenues.

Investors should consider the possibility that the outlook in the industry could have an impact on the stock’s performance. REIT and Equity Trust – Other currently rank in the bottom 26 percent of all 250 plus Zacks industry ranked. Our research shows that the top half of Zacks-ranked businesses outperforms the bottom half by a factor greater than 2 to 1.

Terreno Realty (TRNO) is another stock in the same industry that has yet to report its results for the quarter ending December 2022.

In its next report, this industrial real estate firm is expected to post quarterly earnings at $0.52 per share. This represents an increase of +18.2% year-overyear. The consensus EPS estimate for this quarter has been updated 0.3% to reflect the revisions made over the last 30 day.

Terreno Realty’s revenue is expected to reach $71.45million, an increase of 17.8% over the previous quarter.

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