American Tower Corporation AMT is scheduled to release fourth-quarter and full-year 2024 results on Feb. 25, before the opening bell. While the company’s quarterly results are expected to reflect a year-over-year decline in revenues, adjusted funds from operations (AFFO) per share are expected to rise.

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In the last quarter, American Tower reported an AFFO attributable to AMT common stockholders per share of $2.64, which beat the consensus mark by 3.9%. The quarterly results reflected a year-over-year rise in revenues.

Over the preceding four quarters, the company topped AFFO per share estimates on all occasions, the average beat being 7.2%. 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 fourth quarter. The advancement of mobile technologies like 4G and 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 carried on with its macro-tower investments during the quarter, backed by a solid balance sheet position.

AMT’s data center business is well-poised to benefit from the 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 may have been a spoilsport.

Q4 Projections for AMT

The Zacks Consensus Estimate for operating revenues from the Data Centers segment is currently pegged at $236 million, up from $215 million in the year-ago period.

The Zacks Consensus Estimate for operating revenues from the Services segment stands at $56 million, which suggests a rise from $21 million reported in the prior-year quarter.

However, the consensus estimate for operating revenues from the Total Property segment is pegged at $2.47 billion, which implies a decline from $2.77 billion reported in the year-ago period.

The Zacks Consensus Estimate for quarterly revenues is pegged at $2.50 billion, which indicates a decline of 10.1% from the year-ago period’s reported figure.

American Tower’s activities during the soon-to-be-reported quarter were not adequate to gain analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has moved down a cent to $2.31 over the past month. However, the figure suggests an increase of 0.9% from the year-ago quarter’s reported figure.

AMT’s 2024 Projections

For 2024, American Tower anticipated total property revenues in the range of $9,890 -$9,980 million, suggesting a year-over-year marginal improvement of 0.7% at the midpoint, and adjusted EBITDA of $6,770-$6,850 million, indicating an increase of 1.8% at the midpoint.

AMT projected AFFO attributable to AMT’s common stockholders in the band of $4,890-$4,970 million, implying 6.9% year-over-year growth at the midpoint, and AFFO attributable to AMT’s common stockholders per share in the range of $10.45-$10.62, indicating a rise of 6.7% at the midpoint.

For the full year, the Zacks Consensus Estimate for AFFO per share is pegged at $10.54. The figure indicates a 6.8% increase year over year. However, the Zacks Consensus Estimate for revenues suggests a year-over-year decline of 9.5% to $10.08 billion.

What Our Quantitative Model Predicts

Our proven model doesn’t conclusively predict a surprise in terms of FFO 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 FFO beat, which is not the case here.

American Tower has an Earnings ESP of -0.87% and currently carries a Zacks Rank of 4. 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 — National Storage Affiliates Trust NSA and Postal Realty Trust PSTL — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

National Storage Affiliates, scheduled to report quarterly numbers on Feb. 26, has an Earnings ESP of +0.79% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Postal Realty is slated to report quarterly numbers on Feb. 26. PSTL has an Earnings ESP of +3.70% and carries a Zacks Rank of 3 presently.

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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