February 26, 2009 / 1:07 PM / 11 years ago

UPDATE 3-American Tower Q4 profit beats estimates, shares rise

* Q4 EPS $0.20 vs est. $0.14

* Q4 revenue up 8 pct

* Says foreign exchange rates may hurt 2009 results

* Shares up 9 percent (Adds more details, analyst comments)

By Bijoy Anandoth Koyitty

BANGALORE, Feb 26 (Reuters) - Wireless-tower operator American Tower Corp (AMT.N) reported a quarterly profit that beat analysts’ expectations, helped by a 6 percent rise in rental and management revenue, sending its shares up 9 percent.

U.S. wireless tower operators are expected to see continued growth in 2009 despite the economic slowdown as a strong demand is seen emerging with the launch of various high-speed Internet projects by telecom carriers such as AT&T Inc (T.N) and Sprint Nextel Corp (S.N).

We anticipate amix of existing contract augmentations with associated rent increases and brand new cell-site contracts as further consumer adoption of data services load up the network, Chief Executive Jim Taiclet said on a conference call with analysts.

Revenue strength, despite foreign exchange headwinds, demonstrate the strength of the underlying tower business, with strong order activity in the fall expected to boost the first-quarter trend rate, Goldman Sachs analyst Jason Armstrong wrote in a note to clients.

American Tower also maintained its 2009 rental and management segment revenue outlook of $1.64 billion to $1.67 billion.

The company said revenue for 2009 would be hurt by about $31 million and adjusted EBITDA would be reduced by $16 million if the average foreign currency exchange rates for 2009 remained at current levels.

“Sticking with existing guidance could be a sign that core trend rates might be strong enough to offset any headwinds related to FX,” Armstrong said.

American Tower reported fourth-quarter earnings of $85.8 million, or 20 cents a share, from continuing operations, compared with a loss of $5.5 million, or breakeven per share, in the year-ago period. [ID:nWNAB7231]

On Tuesday, American Tower rival Crown Castle International Corp (CCI.N) narrowed its quarterly loss and forecast per-share results for the first quarter and 2009 mostly in line with expectations. [ID:nBNG179651]

THUMBS DOWN TO MINORITY STAKE

When asked by an analyst to comment on reports that American Tower is eyeing a minority stake in Reliance Communications-controlled (RLCM.BO) Reliance Infratel, CEO Taiclet said the company’s stated strategy has been own and operate assets.

It will not be American Tower’s first priority to be just a pure financial investor with a very small stake in a company run by somebody else, he said.

“Our goal has always been operational control of Tower assets,” the CEO said. [ID:nWNAB7490]

Reliance Communications holds 95 percent stake in Reliance Infratel. News reports from India had also named Crown Castle as a frontrunner for the stake, along with American Tower.

Shares of American Tower, which rose as much as $29.35 in early morning trade, were trading up about $2.11 at $28.93 on Nasdaq. (Reporting by Bijoy Koyitty in Bangalore; Editing by Gopakumar Warrier, Amitha Rajan and Anil D’Silva)

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