Earnings Preview For American Tower (AMT, MITNOY, CCI, SBAC)

American Tower AMT is expected to announce its Q1 earnings report on Tuesday, May 3, before the markets open. Analysts are expecting earnings per share to stand at $0.23, slightly down from the last year's level of $0.24. In the last 60 days, consensus estimate was downgraded by $0.01. American Tower is a wireless and broadcast communications infrastructure company that owns, operates and develops communications sites. Its primary business includes leasing antenna space on multi-tenant communications sites to wireless service providers and radio and television broadcast companies. Looking ahead, earnings per share is expected to fall year-over-year in Q2 as well. Consensus estimate puts Q2 earnings at $0.24, down 4% on $0.25 recorded last year. Earnings per share is expected to rebound in the second half of the year, however, to finish the year 9.9% higher than a year ago. Revenues are expected to grow strongly this year. Consensus estimate puts Q1 revenues at $553.56 and Q2 revenues at $570.65. In the first two quarters of 2011, analysts predict revenues to be higher by 21.8% and 21.4% year-over-year, respectfully. For the whole year, revenues are projected to be $2.3 billion, up 16.5% from a year ago. To see if American Tower can meet these expectations, investors will be closely watching the success or failure of its overseas investments. American Tower recently announced that it has started expanding its facilities in South Africa by acquiring approximately 960 existing towers from Cell C for a sum of approximately $140 million. American Tower is expected to acquire an additional 440 existing towers from Cell C during 2011 for an aggregate purchase price of approximately $60 million. In another sign of the company's ambitious expansion in Africa, American Tower and MTN Group (MITNOY) announced late last year they will establish a joint venture in Ghana, called TowerCo Ghana. American Tower will manage the new joint venture, as well as holding a 51% share in it. Investors will also be interested in American Tower's radical restructuring plan, which was presented last Thursday. According to the plan, American Tower is planning to convert into a real estate investment trust by the start of 2012. By converting into a real estate investment trust, American Towers will be better able to shield itself from income taxes, which could potentially return hundreds of millions of dollars annually. American Tower's position will also be threatened by stiff competition. Crown Castle International CCI returned back to making profit in Q1, after reporting a net loss in the last quarter of 2010. SBA Communications SBAC, another rival, failed to perform the same, however. In fact, SBA is expected to announce net losses throughout this and the following year. Rating Agencies are generally optimistic on American Tower's long-term future. As many as 18 agencies currently have a Buy or a Strong Buy rating on its shares. In the last 90 days, American Tower's shares added 1.02% to their value. Their closing value on Friday was $52.31.