Net income declined, according to American Tower Q3 financial report
In a recent earnings call, American Tower executives reported a year-over-year decline in net income, but is betting on a growing market in India with a $1.21 billion acquisition of Viom Networks.
During the quarter, rental management revenue grew 20% compared to Q3 2014 to $1.21 billion, while net income in that period declined by $124 million to $76 million, or 18 cents per share of common stock.
“The primary drivers of the year-over-year decline in net income were the one-time $93 million cash tax charge as part of our previously announced GTP [real estate investment trust] tax selection and approximately $78 million related to unrealized foreign currency losses attributable to our intercompany balances,” explained Leah Stearns, SVP, treasurer and investor relations at American Tower.
Stearns briefly discussed the Viom Networks acquisition: “Subsequent to the end of the third quarter, we announced an agreement to acquire a 51% controlling stake in Viom Networks in India. Please note that given the regulatory process associated with the transaction, we will not be in a position to provide detail on our future expectations regarding the acquisition until that process has concluded.”
American Tower CTO Tom Bartlett, in his comments, discussed the company’s growth and pointed out American Tower is working to diversify its international assets separate from the Viom Networks deal.
“You can see, we had a solid third quarter from both an organic and an inorganic growth perspective,” Bartlett said. “In addition, we continue to add assets in select key markets where we believe the opportunity for long-term sustainable growth is compelling. This includes the acquisition of the nearly 4,700 towers in Nigeria that we closed in July and a follow-on close of an additional 1,100 sites in Brazil from TIM at the end of September.”
American Tower currently has approximately 14,000 towers in India, and pending the Viom deal will take on 42,200 additional towers. Should the Viom deal close, the joined company will have the second highest number of towers in India.
“With a population of nearly 1.3 billion people, rapidly growing smartphone penetration and limited fixed line infrastructure, India’s vibrant wireless industry is poised for a sustained period of network investment,” American Tower CEO James Taiclet said in a statement.
