American Tower lifts 2025 property revenue forecast on wireless infrastructure demand

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(Reuters) -Wireless infrastructure provider American Tower raised its annual property revenue forecast on Tuesday, betting on healthy leasing activity by wireless carriers.

The company, however, slightly lowered its expectation for full-year organic tenant billings growth in the United States and Canada to about 4.3%, down from 4.3% or more, sending its shares down about 2%.

American Tower said that new business associated with one customer is coming in a bit slower than expected.

“Management clarified that the application pipeline from this customer remains healthy, but the issue is a lengthening of the book-to-bill cycle,” analysts at MoffettNathanson said, adding that American Tower reduced its 2025 leasing forecast by about $5 million to reflect the slower pace.

American Tower also trimmed its net income forecast for 2025 to a range of $2.34 billion to $2.44 billion, from a prior $2.74 billion to $2.84 billion, citing weaker foreign currencies against the U.S. dollar.

While demand for 5G capacity has increased competition among wireless carriers, generating healthy leasing activity for American Tower, the company’s bottom line has come under pressure, as second-quarter net income decreased 58.1% from a year ago to $381 million.

The three largest U.S. telecom firms, AT&T, T-Mobile, and Verizon, accounted for the bulk of American Tower’s property segment revenue last year.

American Tower now expects full-year property revenue between $10.14 billion and $10.29 billion, up from its prior forecast of $9.97 billion to $10.12 billion.

For the year, the company expects AFFO per share between $10.46 and $10.65, above analysts’ estimates of $10.27.

The company posted revenue of $2.63 billion for the quarter ended June 30, compared with analysts’ estimates of $2.60 billion.

(Reporting by Kritika Lamba in Bengaluru; Editing by Sahal Muhammed and Shailesh Kuber)