OUTFRONT Media's Q3 AFFO Beats Estimates, Revenues Miss

OUTFRONT Media Inc. OUT shares have risen 3.6% following its third-quarter 2024 results announced on Nov. 12. Adjusted funds from operations (AFFO) per share of 48 cents surpassed the Zacks Consensus Estimate of 43 cents. The metric increased 4.3% from the prior-year quarter.

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Results reflect higher average revenue per display (yield) across its portfolio and lower operating expenses.

However, quarterly revenues came in at $451.9 million, which missed the Zacks Consensus Estimate marginally. Revenues also declined marginally from the previous year's quarter number of $454.8 million.

According to Jeremy Male, chairman and CEO of OUTFRONT Media, “The strength of our U.S. Media business accelerated slightly in the third quarter, with 5% revenue growth and 11% Adjusted OIBDA growth”. He added, “2024 has been a solid year thus far, and we are on track to achieve the high-end of our full-year Consolidated AFFO growth target.”

OUT’s Q3 in Detail

During the reported quarter, billboard revenues were $360.6 million, reflecting a year-over-year decline of 0.8%. Revenues were impacted by the transaction relating to the Canadian asset sale, partially offset by an increase in average revenue per display, the impact of new and lost billboards in the period, including insignificant acquisitions and higher proceeds from condemnations.

The company’s transit and other revenues of $91.3 million increased 0.1% from the year-ago quarter. The rise was due to an increase in average revenue per display, partially offset by the impact of the transaction relating to the Canadian asset sale and the impact of new and lost transit franchise contracts in the period.

Operating expenses were $233.1 million, which decreased 2.8% year over year. The decline was due to the impact of the Canadian asset sale, lower variable property lease expenses, the net impact of new and lost transit franchise expenses, lower posting, maintenance and other expenses. These were partially offset by higher guaranteed minimum annual payments to the New York Metropolitan Transportation Authority and the impact of new locations, including through acquisitions.

Net interest expenses of $37.1 million decreased 7.7% from $40.2 million in the prior-year period due to a lower debt balance, partially offset by higher interest rates. The weighted average cost of debt, as of Sept. 30, 2024, was 5.5% remaining unchanged from the prior-year period.

OUT’s Cash Flow & Balance Sheet

Net cash flow provided by operating activities for the nine months ended Sept. 30, 2024, was $174.7 million, which increased from $149.2 million in the prior-year period.

As of Sept. 30, 2024, OUTFRONT Media’s liquidity position comprised unrestricted cash of $28 million and $494.3 million of availability under its $500 million revolving credit facility, net of $5.7 million of issued letters of credit.

In the reported quarter, no shares of the company's common stock were sold under its at-the-market (ATM) equity program. It had $232.5 million available under the ATM program at the quarter’s end.

OUT’s Dividend Update

Concurrent with its third-quarter earnings release, OUTFRONT Media announced a special dividend on its common stock of 75 cents per share. The dividend will be paid out on Dec. 31 to its shareholders of record as of Nov. 15, 2024.

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

OUTFRONT Media Inc. Price, Consensus and EPS Surprise

OUTFRONT Media Inc. price-consensus-eps-surprise-chart | OUTFRONT Media Inc. Quote

Performance of Other REITs

Lamar Advertising Company LAMR reported a third-quarter 2024 AFFO per share of $2.15, which missed the Zacks Consensus Estimate of $2.21. The reported figure increased by 5.4% from the prior-year quarter’s tally.

Results reflected year-over-year growth in the top line, though higher expenses acted as a dampener. The company experienced strength in local and programmatic sales. LAMR also raised its 2024 outlook for AFFO per share.

Cousins Properties CUZ reported a third-quarter 2024 FFO per share of 67 cents, in line with the Zacks Consensus Estimate. The figure improved by 3.1% on a year-over-year basis.

Results reflected strong leasing activity and higher rent realizations amid rising demand for office spaces. However, the rise in interest expenses year over year undermined the results to some extent. CUZ also raised its 2024 outlook for FFO per share.

Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.

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