LTE activity drives American Tower Q2 financial results

American Tower Corp. (AMT) grew revenue 27% to $597.2 million, driven by increased LTE buildout activity from AT&T Mobility and Verizon Wireless. The company slightly raised its guidance for the year.
The company reported operating income was up 19.6% in the quarter, compared to a year ago, to $225.8 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 21.2% to $389.1 million, the company said. The company increased its revenue outlook to $2.33 billion to $2.37 billion for the year, and its adjusted EBITDA outlook to between $1.55 billion to $1.59 billion.
“Our combined U.S. and international operations delivered yet another quarter of robust growth with total rental and management revenue increasing 28% and Adjusted EBITDA up 21%. In the U.S., the two leading national wireless carriers continue to actively invest in their networks to meet rapidly expanding demand for mobile data and entertainment, both adding more equipment per site and increasing the density of their sites,” said CEO Jim Taiclet. “Meanwhile, our first international markets in Mexico, Brazil and India are experiencing strong growth due to new spectrum and technology deployments. Coupled with our successful introduction of the collocation business model into a number of new countries in Latin America and Africa, this strong legacy market performance resulted in a near doubling of our international segment revenue in the second quarter.”
Domestic rental and management segment revenue increased 13.4% to $424.9 million, which represented 71% of total revenues. Its international rental and management segment revenue increased 94.2% to $158.9 million, about 27% of total revenues. The remaining 2% of revenue came from network development services.
American Tower spent $138.7 million in total capital expenses during the quarter, the majority of which ($75.2 million) on 84 new tower builds in the United States and 144 internationally. The company spent another $28 million on land and $15 million to update existing equipment to accommodate new tenants, said CFO Tom Bartlett. The company spent $275 million on acquisitions, buying 608 sites internationally and 37 in the United States.
The company is on track to become a REIT (Real Estate Investment Trust) for the taxable year beginning Jan. 1, 2012. Bartlett noted that it received information from Fitch and Moody’s that its investment grade credit ratings should not be impacted if the company chooses REIT status.
Taiclet noted during a conference call that the combination of Sprint Nextel Corp., Clearwire Corp. and LightSquared should be a viable business and could include modifications to some American Tower’s master lease agreements.