April 27, 2017 —
American Tower reported strong growth in the U.S. market in the first quarter with an increase of 6.5 percent in organic tenant billings.
“We saw particularly strong results in our largest core market, the U.S., where our 6.5 percent Organic Tenant Billings Growth was the highest we’ve seen since the second quarter of 2015, supported by a recently amended master lease agreement with one of our tenants,” Jim Taiclet, American CEO said.
Capital Expenditures during the first quarter of 2017 stood at $177 million, of which approximately $24 million was for non-discretionary capital improvements and corporate capital expenditures. During the first quarter, the company spent $512 million to acquire nearly 2,500 sites in France. Additionally, it acquired 1,400 sites in Paraguay from Millicom International Cellular’s subsidiary.
Wireless infrastructure catalysts, such as unlimited plans at Verizon and AT&T, the FirstNet award, visibility into AWS-3, WCS, and 600 MHz deployments, have investors on the U.S. bandwagon, according to Nick Del Deo, MoffettNathanson.
“Just a few months back, few people would have guessed that the U.S. would be the star of the show in 2017. But here we are,” Del Deo wrote in a research note. “Truth be told, the U.S. has always been the star of the show. Aside from its sheer size, that’s because the U.S. tower market rates much higher than just about every other tower market on one absolutely critical dimension: pricing power. In real terms (i.e., inflation-adjusted), the domestic segment has grown at essentially the same pace as American Tower’s international portfolio over the last several years, despite U.S. growth being pressured by AT&T’s pullback in leasing activity and the leasing environment overseas generally perceived as being far more robust.”
Expectations for Full Year 2017 Increased
American Tower is raising the midpoint of its full year 2017 outlook for property revenue, net income, Adjusted EBITDA and Consolidated AFFO by $105 million, $30 million, $70 million and $55 million, respectively, as compared to the company’s 2017 outlook, as updated on March 21, 2017.
“Further, given the recent conclusion of the 600 MHz auction, the numerous other spectrum assets yet to be deployed and several other potential catalysts, we believe that our portfolio of over 40,000 U.S. sites remains optimally positioned to drive strong organic growth over the long term,” Taiclet said.