BOSTON-Attempting to squelch rumors it will run out of cash, American Tower Corp. reaffirmed its total revenues for third quarter 2002.
American Tower expects to report tower revenues in the range of $140 million to $144 million and tower cash flow between $85 million and $89 million. Total revenues are expected to be between $250 million and $269 million, with EBITDA before restructuring charges ranging from $84 million to $92 million. The company added it will record “certain non-cash impairment charges” in the quarter, including the write-down of assets related to its Verestar subsidiary.
“Reaffirming guidance is an unusual step for us,” said Steve Dodge, chairman and chief executive officer. “However, the interests of our stakeholders, including our employees, are being undermined by false rumor and innuendo. The fact is, we are experiencing strong sequential quarterly EBITDA growth and margin expansion, as we drive toward free cash flow in the first quarter 2003.”
American Tower is under pressure following SBA Communications Inc.’s lowered earnings guidance last week and SpectraSite Holdings Inc.’s admission it is nearing bankruptcy. Last week, Moody’s Investors Service assigned a speculative grade liquidity rating of SGL-4 to American Tower, indicating it is among companies most likely to run out of cash within the next 12 months.
Following the company’s statement, analysts from Raymond James stood by their previous statement: “American Tower’s management is focused on addressing investor concerns about its balance sheet and is dedicating its resources toward the continual growth of its core tower rental business. . The realization of further non-core asset sales could be positive catalysts going forward.” Raymond James rates the company’s shares “outperform” and said it believes the company is on the path to maintain the rating.
Shares of American Tower were up 13.33 percent to trade at 85 cents Wednesday morning; the other tower companies were all down with Crown Castle International Inc. trading at $1.98; SBA at 23 cents and SpectraSite at 7 cents.
