SBA Communications Raises Full-Year Adjusted FFO Outlook Amid Robust Demand

(Reuters) – SBA Communications raised its full-year forecast for adjusted funds from operations on Monday, expecting robust activity from wireless carriers amid rising demand for 5G networks.

The Boca Raton, Florida-based company also said it would buy more than 7,000 communications facilities in Central America from telecommunications company Millicom International Cellular SA <> for about $975 million in cash.

The company said the acquired properties are expected to generate approximately $129 million in revenue and $89 million in cash flow from the towers during the first full year of operation following closing, which is expected to occur in 2025.

The companies also agreed to a seven-year exclusivity period during which the SBA will have the exclusive right to build up to 2,500 new facilities for the telecommunications company.

The wireless tower operator is expected to benefit from a surge in demand from U.S. carriers as they upgrade their networks to 5G and increase capacity to meet growing data demand.

The company leases tower space to major wireless carriers including AT&T, T-Mobile US and Verizon Communications.

The SBA raised its guidance range for full-year adjusted funds from operations to $13.20 to $13.45 per share, from $13.06 to $13.43.

The company now expects full-year revenue to be between $2.66 billion and $2.68 billion, down from previous expectations of $2.64 billion to $2.67 billion.

SBA’s third-quarter revenue was $667.6 million, missing analysts’ estimates of $669.8 million, according to data compiled by LSEG.

Adjusted operating funds, a key measure of cash flow, came in at $3.32 per share, slightly beating analysts’ estimates of $3.30.

The company’s website rental revenue for the quarter ended Sept. 30 fell 1.8% to $625.7 million, and website development revenue fell 7.1% to $41.9 million.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Maju Samuel)