American Tower (AMT 113.67, +0.78) has climbed 0.7% after beating earnings expectations for the fourth quarter.
The owner, operator, and developer of wireless communication towers reported above-consensus fourth quarter funds from operations of $1.52 per share on a 20.3% year-over-year increase in revenue to $1.54 billion, which was just shy of expectations.
American Tower's business has benefited from growing smartphone usage, which requires a concurrent increase in bandwidth and coverage. This has fueled steady demand for the company's active tower construction program. The company ended 2016 with nearly 145,000 towers and small cell systems.
Fourth quarter organic tenant billings grew 7.8% year-over-year to $81 million, and during 2017, organic tenant billings growth is expected to exceed 7.0% while consolidated adjusted funds from operations are expected to increase more than 10.0%. The company is targeting annual dividend growth rate of about 20.0%.
Shares of American Tower trade within 5.0% of their record high that was notched in the middle of last year. Like other REITs, the stock has been weighed down by rising interest rates over the past year, but continued demand for the company's services has kept shares buoyant. Including today's gain, the stock is now up 6.8% since the end of 2016 versus a 5.7% gain in the S&P 500.