Lamar Advertising (LAMR) Stock Up On Q3 FFO & Revenues Beat
Zacks Investment Research | Nov 05, 2019 08:12PM ET
Shares of Lamar Advertising Company (NASDAQ:LAMR) gained 2.7%, during Tuesday's regular trading session, after the company reported a better-than-expected performance for third-quarter 2019.
The company reported adjusted funds from operations (FFO) per share of $1.62, surpassing the Zacks Consensus Estimate of $1.59. Moreover, net revenues for the quarter came in at $457.8 million, which also outpaced the Zacks consensus Estimate of $453.2 million.
The company’s impressive quarterly performance reflects solid top-line growth, aided by increase in both local and national advertising revenues. Further, adjusted FFO per share was up 7.3% and net revenues climbed 9.4%, on a year-over-year basis.
Acquisition-adjusted net revenues increased 3.4%, while acquisition-adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were up 5.6%. The company witnessed 3.1% increase in local revenues, and 6.9% growth in national/programmatic revenues. Moreover, same unit digital revenues went up 6.9%.
Quarter in Detail
Operating income improved 10.1% from the prior-year quarter to $141.4 million. Adjusted EBITDA went up 11.8%, year over year, to $215.2 million. Additionally, free cash flow of $138.2 million in the September-end quarter improved 5.7% year over year.
At the end of third-quarter 2019, Lamar had total liquidity of $345.4 million, of which $322.1 million was available for borrowing under its revolving senior credit facility, and around $23.3 million in cash and cash equivalents.
Our Take
Lamar put up an encouraging show during the July-September period. Demand for out-of-home (OOH) advertising is high and the company now expects to attain the higher end of its prior outlook of 2019 adjusted FFO per share.
Lamar’s robust national presence, diversified tenant base and valuable permits augur well for long-term growth. Further, it remains focused to strengthen its position in strategic markets through accretive acquisitions. In fact, the company is anticipated to witness improving revenues, supported by its digital deployment activities, in the upcoming period. Nonetheless, high investment expenditure for OOH advertising expansion might hamper its balance sheet.
Lamar Advertising Company Price, Consensus and EPS Surprise
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