American Tower AMT reported better-than-expected Q3 results and increased 2010 guidance mostly driven by nonorganic items. However, organic growth was
slightly better than expected. Wells Fargo is increasing its 2010-11E EBITDA to $1.34B and $1.50B, respectively, from $1.30B and $1.42B. It is also raising valuation range to $58-61 per share from $53-56. Wells Fargo rates AMT at Outperform.
AMT reported rental revenue of $500MM versus our $476MM estimate (Street $474MM) and EBITDA of $350MM versus our $327MM estimate (Street $330MM). Most of the upside was driven by nonorganic items. Specifically, AMT renegotiated a master lease driving higher noncash revenue $35MM versus our $19MM estimate. AMT closed Essar Telecom one month earlier than we had expected for a roughly $6MM benefit versus Wells Fargo's model. Thus, AMT received roughly a $22MM benefit relative to its estimate on site rental revenue in Q3, accounting for the upside.
AMT is trading higher at $52.09
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Posted In: Analyst ColorAnalyst RatingsTelecommunication ServicesWells FargoWireless Telecommunication Services
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