Shares of Uniti Group (NASDAQ:UNIT) surged on Tuesday after the communications infrastructure real estate investment trust reported its first-quarter results. The company beat analyst expectations across the board, updated investors on the sale of its U.S. towers, and lowered its outlook for 2020. Uniti stock was up 27% at 1:35 p.m. EDT.
Uniti reported first-quarter revenue of $266.2 million, up 2% year over year and about $0.6 million higher than the average analyst estimate. Adjusted funds from operations per share was $0.45, down from $0.59 in the prior-year period but $0.24 higher than analysts were expecting.
Along with its results, Uniti disclosed that it has entered into a revised agreement related to the sale of its U.S. towers. Uniti will sell 90% of its U.S. tower business to Melody Investment Advisors for $220 million in cash, compared to $190 million under the original deal. Uniti will retain a 10% investment interest in the business, and it will receive an incremental earnout for each pipeline tower completed in 2020.
Uniti said that it has not seen any meaningful impact on its business from the pandemic.
Uniti updated its full-year guidance to reflect the new structure of the U.S. tower sale. The company now expects revenue between $1.05 billion to $1.06 billion, and adjusted funds from operations between $383 million and $391 million, or between $1.73 and $1.76 per share.
Previously, Uniti's 2020 outlook called for revenue between $1.116 billion and $1.128 billion, and adjusted funds from operations between $394 million and $406 million.
Including Tuesday's rally, shares of Uniti are now up about 10% since the beginning of the year.