American Tower Gears Up for Q1 Earnings: What's in the Cards?

American Tower Corporation AMT is scheduled to release first-quarter 2025 results on April 29, before the opening bell. The company’s quarterly results are expected to reflect a year-over-year decline in revenues and adjusted funds from operations (AFFO) per share.

In the last quarter, American Tower reported an AFFO attributable to AMT common stockholders per share of $2.32, which missed the consensus mark of $2.33. The quarterly results reflected a year-over-year rise in revenues.

Over the preceding four quarters, the company’s AFFO per share estimates topped on three occasions and missed in the remaining period, the average beat being 5.8%. The graph below depicts this surprise history:

American Tower Corporation Price and EPS Surprise

American Tower Corporation price-eps-surprise | American Tower Corporation Quote

Factors to Note Ahead of AMT’s Results

American Tower is likely to have continued to benefit from the secular growth trends of the wireless industry in the first quarter. The advancement of mobile technologies like 5G networks, along with the increase in bandwidth-intensive applications, has significantly boosted global mobile data usage.

Consequently, wireless service providers and carriers are deploying additional equipment on existing networks to enhance their coverage and capacity, meeting the rising consumer demand. This positive trend is likely to have driven the demand for AMT’s extensive and geographically diverse communication real estate portfolio, favorably impacting its quarterly performance.

The REIT is also anticipated to have continued with its macro-tower investments during the quarter, backed by a solid balance sheet position.

AMT’s data center business is likely to have benefited from growth in cloud computing, the Internet of Things, big data and the elevated demand for third-party IT infrastructure.

However, higher interest expenses are likely to have affected AMT’s performance to some extent during the quarter. Also, the elevated churn in certain markets where the company operates might have been a spoilsport.

Q1 Projections for AMT

The Zacks Consensus Estimate for operating revenues from the Data Centers segment is currently pegged at $250.3 million, indicating an uptick from $225 million in the year-ago period.

The consensus estimate for operating revenues from the Services segment is pinned at $60.3 million, which indicates a rise from $30 million reported in the prior-year quarter.

American Tower’s activities during the soon-to-be-reported quarter have been adequate to gain analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has moved up a cent to $2.60 in the past month. However, the figure implies a decrease of 6.8% from the year-ago quarter’s reported figure.

However, the consensus estimate for operating revenues from the Total Property segment is pegged at $2.45 billion, which implies a decline from $2.80 billion reported in the year-ago period.

The Zacks Consensus Estimate for quarterly revenues is pegged at $2.51 billion, which indicates a decline of 11.3% from the year-ago period’s reported figure.

What Our Quantitative Model Predicts

Our proven model predicts a likely surprise in terms of AFFO per share for American Tower this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is exactly the case here.

American Tower has an Earnings ESP of +0.27% and currently carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two other stocks from the broader REIT sector — Welltower WELL and Vornado Realty Trust VNO — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

WELL, scheduled to report quarterly numbers on April 28, has an Earnings ESP of +1.69% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vornado is slated to report quarterly numbers on May 5. VNO presently has an Earnings ESP of +2.03% and a Zacks Rank of 3. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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