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American Tower Posts Strong Growth on Minimal Covid-19 Impact

The communications REIT missed predictions but delivered encouraging year-over-year results

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Margaret Moran
Apr 29, 2020
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On April 29 before the market opened, American Tower Corp. (

AMT, Financial), a wireless and broadcast communications infrastructure real estate investment trust (REIT), reported its earnings results for the first quarter of 2019.

The company delivered $1.99 billion in revenue, which is up 9.9% from the prior-year quarter. Net income increased 2.7% to $419 million, while diluted earnings per share were up 4.5% to 93 cents. Analysts had predicted revenue of $2 billion and EPS of $1.07.

Following the news, shares fell approximately 2.5% to around $237.05 in intraday trading.

Quarter highlights

Tom Bartlett, American Tower’s CEO, said the following in the earnings report:

“Despite the challenges posed by the COVID-19 pandemic, we delivered a solid first quarter, including U.S. Organic Tenant Billings Growth of 5.6%, consistent international leasing activity and a 20% dividend increase. We believe that the resilience and stability of our business model, our investment-grade balance sheet, substantial liquidity and the secular global growth trends in mobile data usage will help us manage through the ongoing crisis.”

Overall, the company reported little change in business operations as collected fees from the communications companies that use its wireless towers and other properties remained strong. Property income increased 10.5% year over year.

Ebitda increased 14.1% compared to revenue growth of 9.9%, primarily reflecting the retirement of $34.6 million worth of long-term debt obligations and $63.8 million in expenses listed under “other.” Share repurchases of $47.7 million covered executive stock option compensation plan expenses of the same amount. The margin of Ebitda to net income increased from 61% to 64%.

In terms of acquisitions, the company purchased 193 new communications sites for $49 million, primarily in non-U.S. markets. It also completed its buyout of MTN Group Ltd.’s (JSE:MTN) noncontrolling interests in each of the two companies’ joint ventures in Ghana and Uganda for approximately $524 million, bringing its ownership of the properties from 51% to 100%.


On April 29, American Tower had a market cap of approximately $105.14 billion and a price-earnings ratio of 56.07, which is in line with the company’s historical median valuation. The Peter Lynch chart indicates that the stock is trading at a high multiple, in line with its typical high price.


Both the discounted cash flow value of $152.55 per share and the Peter Lynch fair value of $55.46 indicate that shares have traded much higher on investor optimism compared to the present value of the business itself.


GuruFocus gives the company a financial strength rating of 10 out of 10 and a profitability rating of 9 out of 10. The interest coverage of 3.3 times is low, as is the current ratio of 0.47, suggesting that if cash flows were to falter the company could be in trouble. However, the company’s return on invested capital is 8.43% compared to a weighted average cost of capital of 2.05%, indicating strong profitability, while the operating margin has improved to 35.47%. The Altman Z-Score of 2.01 suggests that American Tower is not in immediate danger of bankruptcy.



American Tower provided guidance for full-year 2020, reporting that it does not expect any material impact to operations from Covid-19 as of April 29.

The company aims for full-year 2020 property revenue of $7.675 billion to $7.825 billion and net income of $1.790 billion to $1.890 billion, as compared to property revenue of $7.465 billion and net income of $1.888 billion for full-year 2019. Capital expenditures are expected to be between $1.05 billion and $1.15 billion in 2020 compared to $991 million in 2019.

Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Investors should always conduct their own careful research or consult registered investment advisors before taking action in the stock market.

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