BOCA RATON, Fla. - SBA Communications Corporation (NASDAQ: NASDAQ:SBAC), a leading owner and operator of wireless communications infrastructure, has announced its financial results for the quarter ended September 30, 2024. The company saw a net income of $255.9 million or $2.40 per share, and an Adjusted Funds from Operations (AFFO) per share of $3.32.
In a strategic move to enhance its footprint in Central America, SBA Communications entered into an agreement to acquire over 7,000 communication sites from Millicom International Cellular S.A. for approximately $975 million in cash. These sites, located in Guatemala, Honduras, Panama, El Salvador, and Nicaragua, are expected to generate around $129 million in revenues and $89 million in tower cash flow in their first full year post-acquisition. The deal also includes a 15-year Master Lease Agreement with Millicom for the sites and an exclusivity right for SBA to build up to 2,500 new sites over seven years.
Additionally, the company has declared a quarterly cash dividend of $0.98 per share, payable on December 12, 2024, to shareholders of record as of November 14, 2024.
SBA Communications' President and CEO, Brendan Cavanagh, commented on the company's performance and the Millicom deal, stating, "We continued to execute well during the third quarter, producing operational and financial results in line with our expectations. Our positive results and momentum have allowed us to increase our full year outlook for all key financial metrics." He also highlighted the company's refinancing activities and interest rate management, which underscore its access to attractively priced capital.
For the third quarter of 2024, SBA reported a slight decrease in total revenues to $667.6 million, down 2.2% from the prior year. This was attributed to a drop in site leasing and site development revenues. However, the company's operational efficiency is reflected in its Tower Cash Flow Margin, which remained strong at 81.3%.
SBA ended the quarter with $12.4 billion in total debt and a Net Debt to Annualized Adjusted EBITDA Leverage Ratio of 6.4x. The company's financing activities included the issuance of $2.07 billion of Tower Securities at a blended effective rate of 4.778%, taking advantage of lower-than-expected interest rates.
Looking ahead, SBA has updated its full year 2024 outlook, expecting increased performance across key financial metrics. The company anticipates the closure of the Millicom transaction sometime in 2025.
The information presented in this article is based on a press release statement from SBA Communications Corporation.
In other recent news, SBA Communications reported a successful third quarter, surpassing earnings estimates and simultaneously raising its full-year 2024 outlook. The wireless tower operator posted adjusted earnings per share of $2.40, notably higher than the predicted $2.26. However, its revenue of $667.6 million was slightly under the consensus forecast of $669.29 million, though it still marked a 0.3% year-over-year increase excluding foreign exchange impacts.
SBA Communications CEO, Brendan Cavanagh, expressed satisfaction with the company's performance, noting increased carrier activity in the U.S. and solid international leasing results. He also highlighted the services business, which had its strongest quarter of the year for both revenue and gross profit.
In terms of future projections, the company raised its 2024 revenue forecast to between $2.66 billion and $2.68 billion, exceeding the analyst projections of $2.659 billion. The company also shared its plans to acquire over 7,000 communication sites in Central America from Millicom for approximately $975 million, a deal expected to close in 2025. These are among the recent developments for SBA Communications.
InvestingPro Insights
SBA Communications Corporation's (NASDAQ: SBAC) recent financial results and strategic moves align with several key insights from InvestingPro. The company's market capitalization stands at $25.85 billion, reflecting its significant presence in the Specialized REITs industry.
One notable InvestingPro Tip highlights that SBAC has raised its dividend for 5 consecutive years, which is consistent with the company's recent declaration of a $0.98 quarterly cash dividend. This trend underscores SBAC's commitment to returning value to shareholders, with a current dividend yield of 1.62%.
Another relevant InvestingPro Tip indicates that net income is expected to grow this year. This aligns with the company's reported net income of $255.9 million for the quarter and its updated full-year outlook projecting increased performance across key financial metrics.
The company's P/E ratio of 50.37 suggests that SBAC is trading at a high earnings multiple, which could be justified by its strong market position and growth prospects, including the recent agreement to acquire over 7,000 communication sites from Millicom International Cellular S.A.
It's worth noting that SBAC's revenue for the last twelve months as of Q2 2024 was $2,675.91 million, with a slight revenue decline of 1.47% over the same period. This aligns with the reported decrease in total revenues for the third quarter of 2024.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for SBAC, providing a deeper understanding of the company's financial health and market position.
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