What Awaits SBA Communications (SBAC) This Earnings Season?
Zacks Investment Research | Apr 23, 2019 10:07PM ET
SBA Communications Corporation (NASDAQ:SBAC) is scheduled to report first-quarter 2019 results on Apr 29, after the closing bell. In the last reported quarter, the company delivered a positive earnings surprise of 4.2%. Notably, SBA Communications surpassed the Zacks Consensus Estimate in each of the last four quarters, with the average being 9%.
The communications tower operator is likely to report higher year-over-year revenues in both the operating segments on the back of solid domestic and international site leasing activity, excellent services, and cost control initiatives. Whether this can result into an earnings beat remains to be seen.
Let’s find out how things are shaping up prior to the announcement —
SBA Communications is well positioned to drive its business supported by strong customer activity in both domestic and international markets, coupled with a healthy U.S. backlog. Starting first quarter, the company owned or operated 29,578 communication sites, of which, 16,263 are located in the United States.
The Zacks Consensus Estimate for revenues from Site Leasing business, which accounts for the lion’s share of total revenues, is pegged at $451 million, up from $431 million reported in first-quarter 2018. While domestic site leasing revenues are expected to improve to $361 million from $342 million reported a year ago, international site leasing revenues are likely to increase to $92 million from $89 million.
Revenues from Site Development business are estimated to be $33 million compared with $27.8 million reported in the prior-year quarter. For the first quarter, the consensus estimate for total revenues stands at $482 million. The company reported $458 million in the year-earlier quarter. Adjusted funds from operations (AFFO) per share is pegged at $1.99. The company reported earnings of 27 cents per share in the prior-year quarter.
Also, operating profit from Site Leasing is expected to increase to $358 million from $338 million reported in the year-earlier quarter, while the same from Site Development is likely to improve to $7.5 million from $5.2 million.
SBA Communications believes that the synergies of robust customer demand, operational efficiency and strategic capital allocation will help it to enhance shareholder value by growth in AFFO. However, the company remains susceptible to earnings volatility due to unfavorable foreign currency movements on account of its geographically diverse scale of operations.
What Our Model Says
Our proven model does not conclusively show that SBA Communications is likely to beat earnings in the to-be-reported quarter as it does not possess one of the two key components. A stock needs to have both a positive Zacks Investment Research
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