OUTFRONT Media's Q3 AFFO Beats Estimates, Revenues Miss

Outfront Media (OUT) came out with quarterly funds from operations (FFO) of $0.48 per share, beating the Zacks Consensus Estimate of $0.43 per share. This compares to FFO of $0.46 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an FFO surprise of 12.33%. A quarter ago, it was expected that this billboard, transit and digital display advertising company would post FFO of $0.46 per share when it actually produced FFO of $0.49, delivering a surprise of 6.52%.

Over the last four quarters, the company has surpassed consensus FFO estimates two times.

Outfront Media, which belongs to the Zacks REIT and Equity Trust - Other industry, posted revenues of $451.9 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 0.60%. This compares to year-ago revenues of $454.8 million. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future FFO expectations will mostly depend on management's commentary on the earnings call.

Outfront Media shares have added about 29.3% since the beginning of the year versus the S&P 500's gain of 25.8%.

What's Next for Outfront Media?

While Outfront Media has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's FFO outlook. Not only does this include current consensus FFO expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Outfront Media: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus FFO estimate is $0.65 on $502.78 million in revenues for the coming quarter and $1.70 on $1.84 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, REIT and Equity Trust - Other is currently in the top 27% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the broader Zacks Finance sector, BTCS Inc. (BTCS), has yet to report results for the quarter ended September 2024.

This company is expected to post quarterly loss of $0.06 per share in its upcoming report, which represents a year-over-year change of -50%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

BTCS Inc.'s revenues are expected to be $0.6 million, up 87.5% from the year-ago quarter.

Zacks Investment Research

Shares of Lamar Advertising Company LAMR were up marginally on the Nov. 8 normal trading session on the Nasdaq after it reported third-quarter 2024 adjusted funds from operations (AFFO) per share of $2.15, which increased 5.4% year over year but missed the Zacks Consensus Estimate of $2.21.

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Results reflect year-over-year growth in the top line, though higher expenses acted as a dampener. The company experienced strength in local and programmatic sales.

Quarterly net revenues of $564.1 million increased 4.0% on a year-over-year basis and missed the consensus mark of $567.3 million.

Per the company’s chief executive, Sean Reilly, “Expenses were slightly elevated but as we move through Q4, we see that correcting and see full year consolidated EBITDA margins coming in right around 47%.” He also noted that “In addition, Q4 revenue growth is pacing ahead of Q3. Consequently, we are raising full year guidance for diluted AFFO to a range of $7.85 to $7.95 per share.”

LAMR’s Q3 in Detail

Operating income of $186.6 million declined 0.8% from the year-ago period, while the adjusted EBITDA increased 2.1% to $271.2 million.

Acquisition-adjusted net revenues for the third quarter climbed 3.6% year over year. Also, acquisition-adjusted EBITDA rose 1.8%.

Direct advertising expenses increased 4.2% year over year to $182.7 million during the reported quarter.

The company’s free cash flow of $198.1 million for the third quarter jumped 9.4% year over year.

Cash flow provided by operating activities was $227.4 million for the three months ended Sept. 30, 2024, up from $222.5 million for the third quarter of 2023.

LAMR’s Balance Sheet

As of Sept. 30, 2024, Lamar Advertising had a total liquidity of $450.7 million. This comprised $421.2 million available for borrowing under its revolving senior credit facility and $29.5 million in cash and cash equivalents. As of the same date, the company had $320.0 million in borrowings outstanding under its revolving credit facility and $249.8 million outstanding under the Accounts Receivable Securitization Program.

LAMR’s Outlook

Lamar Advertising raised its 2024 AFFO per share to the range of $7.85-$7.95 from the $7.75-$7.90 range guided earlier. The Zacks Consensus Estimate is currently pegged at $8.09.

Lamar currently carries a Zacks Rank #3 (Hold).

Lamar Advertising Company Price, Consensus and EPS Surprise

Lamar Advertising Company price-consensus-eps-surprise-chart | Lamar Advertising Company Quote

Performance of Other REITs

Public Storage PSA reported third-quarter 2024 core funds from operations (FFO) per share of $4.20, which missed the Zacks Consensus Estimate of $4.25. Also, the figure declined 3% year over year.

Public Storage experienced lower realized annual rent per occupied square foot and a decline in occupancy, as well as a rise in other direct property costs, repairs and maintenance expenses, marketing expenses and interest expenses in the quarter. PSA currently carries a Zacks Rank #3.

Federal Realty Investment Trust’s FRT third-quarter 2024 FFO per share of $1.71 narrowly missed the Zacks Consensus Estimate of $1.72. However, this marked a rise of 3.6% from the year-ago quarter’s tally of $1.65.

Results reflected healthy leasing activity and significant occupancy gains at its properties. FRT also tightened and increased its guidance for 2024 FFO per share. Currently, FRT carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

Zacks Investment Research