Image source: Getty Images.

American Tower's (AMT -0.24%) name does not do it justice. That's because the company's international towers were the story in the second quarter, with its recent international tower acquisitions driving 69.7% growth in international tower revenue. That segment now accounts for 42% of its total revenue and 32% of its segment operating profit and is growing twice as fast on an organic basis as its domestic tower portfolio.

American Tower results: The raw numbers


Q1 2016 Actuals

Q1 2015 Actuals

Growth (YOY)


$1.4 billion

$1.2 billion


Adjusted Funds from Operations

$592.0 million

$536.8 million






Data source: American Tower. YOY = year over year.

What happened with American Tower this quarter? 

American Tower's international operations drove results.

  • American Tower's Asia segment drove growth in the second quarter, with its revenue up 274.3% year over year to $225 million. Driving that increase was the acquisition of a 51% stake in India's Viom Networks, which added 42,000 tower sites to the company's portfolio.
  • Growth in Europe, the Middle East, and Africa (EMEA) was also very robust, with revenue jumping 91.4% to $135 million. The recent acquisition of 1,350 towers in Tanzania from Bharti Airtel was the key contributor to that region's growth.
  • Meanwhile, growth in Latin America was a bit more moderate at 7.3%, driven primarily by the recent acquisition of TIM Cellular in Brazil.
  • Finally, revenue in the U.S. was up 3.3%, mainly because of total organic tenant billings growth, which was up 5.6%. Although, that is less than half the 13.7% total organic tenant billings growth rate of its international segment.

What management had to say

In commenting on the quarter, CEO Jim Taiclet said:

Our Company's strong second quarter total Property Revenue growth of nearly 24% was powered by solid U.S. Organic Tenant Billings Growth of nearly 6%, and more than double that level in our international markets, at approximately 14%. Total Organic Tenant Billings grew by approximately 8% in the quarter and were further enhanced by an approximately 15% contribution in New Site Tenant Billings associated primarily with our Viom transaction in India and sites acquired from Bharti Airtel in Nigeria and TIM in Brazil.

American Tower's decision to expand internationally is paying big dividends. Its revenue in the second quarter grew more than twice as fast as leading U.S. tower REIT Crown Castle (CCI 0.04%), which increased site rental revenues by 9% last quarter. Further, by limiting itself to the U.S. marketplace, Crown Castle only expects full-year site rental growth of 7%, while AFFO is expected to grow by 12%. That said, Crown Castle is growing faster in the U.S. than American Tower, but on an absolute basis, it's lagging behind its globally focused peer.

Looking forward 

In fact, American Tower's outlook for 2016 is much brighter than Crown Castle's. The global tower REIT now expects total property revenue to soar by 20.9% at the midpoint, while consolidated AFFO is projected to grow by 13.5%. That is a slight improvement from last quarter's guidance of 20.7% revenue growth and 12.8% AFFO growth at the midpoint. Driving this upward revision is the company's strong second-quarter showing as well as its outlook for continued organic growth as it adds more tenants to its towers, especially those overseas.