SBA Communications (NASDAQ: SBAC) reported Q2 EPS of $0.20, $0.10 worse than the analyst estimate of $0.30. Revenue for the quarter came in at $507.23 million versus the consensus estimate of $501.81 million.

Highlights of the second quarter include:

• Net income of $22.8 million or $0.20 per share and site leasing revenue of $482.4 million
• AFFO per share growth of 14.8% over the year earlier period on a constant currency basis
• Tower Cash Flow and Adjusted EBITDA margins of 81.8% and 72.8%, respectively
• Subsequent to quarter end, issued $1.35 billion of Tower Securities at a blended rate of 2.081%

“We are very pleased with our second quarter results”, commented Jeffrey A. Stoops. “Through the entire period in all of our markets we operated under Covid-19 conditions, and I am extremely proud of the way in which our team members performed, the levels at which they performed and the fine results we were able to provide our customers and the communities we serve. Our operational performance, as best evidenced by our margins, continues to be excellent, and I commend all of our team members. In the US, activity levels were similar to first quarter levels but slower than the comparable year-ago period. We’ve seen a slower start than we expected to new revenue bookings post the T-Mobile-Sprint merger, but recent increases in leasing activities and backlogs give us confidence in the rest of the year. We expect to see increasing levels of operational activity in the US as we move through the year, with the reported financial results to follow. Internationally, demand remains solid as well although several of our markets have been particularly hard hit by the Covid-19 crisis, which we anticipate temporarily affecting the level of capital investment by some of our international wireless carrier customers. However, in these markets in particular the pandemic has highlighted the critical role of wireless as the primary source of broadband services, even before consideration of all of the benefits 5G service will bring. As business and consumer economic conditions improve in these markets we expect wireless capital spending will increase even more.”

“In addition to our strong operational performance, during the second quarter and early third quarter, we took advantage of very favorable capital markets conditions to build a fortress balance sheet. We lowered our weighted average interest rate, extended our maturities and increased liquidity to record levels. We are comfortable at current leverage levels, with future capital allocation priorities first to our dividend and then the substantial remaining amount of investable capital to opportunistic portfolio growth and stock repurchases. During these challenging times, we realize and appreciate the essential nature and mission-criticality of our business. We expect to stay very busy serving our customers and communities, helping to continuously improve wireless service in general, and deploying 5G service in particular, while we execute well against increasing operational demand and grow AFFO per share materially”.

GUIDANCE:

SBA Communications sees FY2020 revenue of $2.047-2.087 billion, versus the consensus of $2.07 billion.

The Company is updating its full year 2020 Outlook for anticipated results. The Outlook provided is based on a number of assumptions that the Company believes are reasonable at the time of this press release. Information regarding potential risks that could cause the actual results to differ from these forward-looking statements is set forth below and in the Company’s filings with the Securities and Exchange Commission.

The Company’s full year 2020 Outlook assumes the acquisitions of only those communication sites under contract and anticipated to close at the time of this press release. The Company may spend additional capital in 2020 on acquiring revenue producing assets not yet identified or under contract, the impact of which is not reflected in the 2020 guidance. The Outlook also does not contemplate any additional repurchases of the Company’s stock during 2020, although the Company may ultimately spend capital to repurchase some of its stock during the year.

The Company’s Outlook assumes an average foreign currency exchange rate of 5.45 Brazilian Reais to 1.0 U.S. Dollar, 1.37 Canadian Dollars to 1.0 U.S. Dollar, and 17.3 South African Rand to 1.0 U.S. Dollar throughout the last two quarters of 2020. When compared to the Company’s full year 2020 Outlook provided May 5, 2020, the variances in the actual second quarter foreign currency exchange rates versus the Company’s assumptions, and the changes in the Company’s foreign currency rate assumptions for the remainder of the year, positively impacted the 2020 full year Outlook by the amounts indicated in the chart below.

For earnings history and earnings-related data on SBA Communications (SBAC) click here.