Like the other public tower companies, American Tower experienced a solid first quarter. The comm-infra firm’s total revenue increased 8.3 percent to $2,159 million in the first quarter 2021, while net income increased 55.8 percent to $652 million, adjusted EBITDA increased 13.3 percent to $1,440 million and consolidated AFFO increased 23.8 percent to $1,123 million.
“Looking forward, in the U.S., we expect that the gathering 5G momentum will enable us to leverage our extensive site portfolio and mutually beneficial relationships with key tenants to drive sustainable, predictable, recurring long-term growth in cash flows,” Tom Bartlett, American Tower’s CEO, said in a prepared statement.
Internationally, American Tower began 2021 by entering into the Telxius Towers transaction, which Bartlett said he expects to transform the company’s European business.
“Internationally, large multinational carriers are aggressively investing in their wireless networks to keep pace with rapidly growing mobile data usage as smartphone penetration accelerates and network technologies advance,” Bartlett said. “Our global teams followed that by delivering a strong quarter, highlighted by elevated demand for our sites, the construction of nearly 2,000 new towers and highly attractive growth in consolidated AFFO per Share.”
Spencer Kurn, analyst for New Street Research, wrote that American Tower’s results, along with Crown Castle International and SBA Communications, are confirmation that “activity levels are rising sharply as carriers accelerate 5G deployments, which bodes well for growth later this year and into 2022.”
In a U.S. Communications Infrastructure Research note, Nick Del Deo, senior analyst, MoffettNathanson, noted that, like the other public tower companies, American Tower benefits from T-Mobile’s 2.5 GHz buildout, the C-band deployments and Dish Network‘s nationwide 5G build. However, he wrote about some wrinkles will set American Tower apart.
“First, American Tower is set to get hit with Sprint-related churn much earlier than its peers, with the first slug coming in Q4 of this year,” Del Deo wrote. “We try to focus on churn over the cycle in our work, but the market also cares about annual growth rates. Second, American Tower’s greater embrace of [master lease agreements] MLAs is likely to mute the benefits of the coming leasing upswing (and mute the deceleration on the other side), as more of its revenue is already locked in.
“And third, American Tower seems to be taking the most deliberate steps to try offsetting the pain of the Sprint churn to minimize its impact,” he added. “These include: ramping up new tower construction overseas; driving cost efficiencies within its business; and stepping up accretive M&A activity, most notably InSite Wireless Group and Telxius.”