American Tower (AMT 0.96%) continued to benefit from increased use of mobile data, which drove demand for space on its telecom towers. That enabled the communications tower real estate investment trust to grow its cash flow at a double-digit rate for the 11th straight year. That trend of demand growth for tower space will continue across most of the world in 2019. However, a consolidation wave among mobile carriers in India will negatively impact the company's results in the coming year.  

American Tower results: The raw numbers


Q4 2018

Q4 2017

Year-Over-Year Change


$2.13 billion

$1.71 billion


Adjusted funds from operations

$876.9 million

$688.4 million






Data source: American Tower.

What happened with American Tower this quarter? 

Asia led the way, but there's a catch:

  • The company's U.S. segment generated $976 million in revenue during the quarter, up 7% from the year-ago period, driven by an 8% increase in organic tenant billings as it added more customers to existing towers.
  • Revenue from Asia rocketed 114.5% to $637 million due entirely to a settlement with Tata Group, whereby American Tower released it from some leases in exchange for a one-time cash payment. Organic tenant billings, in the meantime, declined 25.5% versus the prior year period.
  • Latin American revenue grew 0.8% to $311 million, driven mainly by 10.2% organic tenant billings growth.
  • Revenue in the company's Europe, Middle East, and Africa (EMEA) segment rose 12% year over year to $180 million thanks to a 6.3% rise in organic tenant billings and the acquisition additional tower sites in Kenya.
  • For the full year, American Tower generated $7.32 billion in total property revenue, which was up 11.4% from 2017 and above the high end of the company's $7.2 billion to $7.26 billion guidance range. Consolidated AFFO, meanwhile, came in at $3.54 billion, which 22% higher year over year and also above the high end of its $3.47 billion to $3.5 billion guidance range. While the Tata settlement provided a one-time boost of $334 million in revenue and $313 million in AFFO, American Tower added 24,000 sites to its portfolio last year -- boosting its total to more than 170,000 -- which helped drive growth.
Cell towers with an orange sky behind them.

Image source: Getty Images.

What management had to say

In CEO Jim Taiclet's comments on the company's results, he said, "We were pleased to conclude the first year of our Stand and Deliver strategy with a strong quarter, particularly in the U.S. where Organic Tenant Billings Growth reached 8% for the first time since 2014. We continued to deploy capital using our proven methodology throughout 2018, adding over 24,000 sites to our portfolio, increasing our dividend by 20% and repurchasing more than $230 million in stock, all while growing our Consolidated AFFO per share by double digits for the 11th consecutive year."

On 2017's fourth-quarter conference call, Taiclet unveiled American Tower's Stand and Deliver strategy, a 10-year plan to drive operational efficiency, grow its portfolio and capabilities, innovate, and enhance its industry leadership. The company made good progress last year, especially on the second pillar of its strategy to expand its portfolio, which it did by acquiring another 24,000 sites. Those new additions helped drive growth in 2018 and enhance its organic growth potential since the company can add more tenants to many of these locations in the future.

Check out all our earnings call transcripts.

Looking forward 

American Tower anticipates strong organic growth again in 2019 as it sees U.S. tenant billings increasing by 7%. However, the settlement with Tata and the ongoing consolidation-related issues in India will have a notable impact on its overall results. The company sees those factors reducing revenue by $380 million and consolidated AFFO by $214 million. As a result, it expects full-year revenue to be between $7.13 billion and $7.3 billion while consolidated AFFO will be in the range of $3.4 billion to $3.5 billion, implying declines of 1.4% and 3.2%, respectively, at the midpoint. American Tower could potentially offset this impact by making additional acquisitions in 2019.