American Tower, a global communications infrastructure company, said its revenue rose by 3.6 percent to $2,772 million in the quarter ended June 30, 2023.
However, net income experienced a decline of 48.2 percent, amounting to $462 million. Despite this decrease in net income, the company remained optimistic about its performance, attributing the growth in revenue to various positive factors.
One of the significant contributors to the revenue growth was the increase in property revenue, which climbed by 4.4 percent to $2,729 million. Furthermore, American Tower invested approximately $417 million in capital expenditures, with $34 million allocated for non-discretionary capital improvements and corporate capital expenditures.
Expanding its footprint, American Tower spent $30 million on the acquisition of 60 communications sites and other communications infrastructure assets, with a focus on France and Spain. The company believes that this strategic move will position them well in the evolving telecommunications landscape and contribute to long-term growth.
Tom Bartlett, American Tower’s Chief Executive Officer, highlighted the company’s achievements, citing that Consolidated Organic Tenant Billings Growth exceeded 6 percent for two consecutive quarters. He also emphasized the solid leasing performance in the U.S. Data Center segment and the company’s focus on cost controls, which all contributed to strong growth and attractive margin expansion.
As the 5G investment cycle continues, American Tower remains confident in its portfolio of globally distributed communications assets, believing it is well-positioned to drive sustained, elevated leasing growth. This growth, coupled with the company’s emphasis on cost management, capital allocation discipline, and dividend growth, is expected to deliver attractive shareholder returns over the long term.
Looking ahead, American Tower has set ambitious targets for 2023. The company aims to achieve property revenue between $10.79 billion and $10.97 billion, with a net income ranging from $1.785 billion to $1.845 billion. Furthermore, American Tower raised the midpoints of its 2023 outlook for property revenue, Adjusted EBITDA, AFFO attributable to AMT common stockholders, and AFFO attributable to AMT common stockholders per Share, primarily driven by core property outperformance.
The company sees immense opportunities for growth, particularly in non-U.S. markets. Industry estimates forecast approximately $35 billion in carrier capital expenditure (Capex) across these markets in 2023. Additionally, mobile data consumption is expected to grow in the range of 20 percent to 30 percent on average in these regions over the next several years.
American Tower has strategically anchored its portfolio in key markets globally, with varying stages of network development. While the U.S. has achieved substantial 5G coverage, other regions like Europe, Africa, and Latin America are at different levels of deployment. This suggests significant potential for 5G and other next-generation technology investments, requiring incremental network density and expansion.
With a strong presence in Africa, American Tower has built over 45,000 international sites, with approximately 65 percent constructed since the beginning of 2017. The company’s strategic relationships with key wireless operators in the region have facilitated the construction of several thousand new sites, delivering promising yields.
As the 4G cycle matures and the shift towards 5G begins, American Tower anticipates compelling growth in capacity utilization across its assets. Moreover, the company’s regional scale and leading capabilities have opened up opportunities for investing in accretive platform extensions, such as the power as a service program in Africa.
American Tower remains optimistic about the future and is confident in its ability to capitalize on the burgeoning opportunities in the global communications infrastructure sector. With a focus on growth, efficiency, and shareholder returns, the company is poised to remain a key player in the telecommunications industry.