Baton Rouge-based Lamar Advertising’s third quarter earnings exceeded its own expectations, which the company partly attributes to an uptick in political spending this election season.
Lamar reports its net revenue rose to $387.5 million in the third quarter, up from $350.7 million during the same three month period last year. Operating income rose to $119.8 million, up from $111.6 million, but net income decreased to $85.1 million, down from $86 million.
The company’s adjusted funds from operations—a measure that indicates a real estate investment trust’s financial ability to pay dividends to shareholders—increased $11.3 million to $134 million in the third quarter. Lamar converted to a REIT last year, allowing the billboard giant to return cash to shareholders, avoid some federal income taxes and boost the value of its stock. Lamar is required to distribute annually to its stockholders an amount equal to at least 90% of its REIT taxable income.
Through the third quarter, Lamar reports revenues of $1.1 billion so far this year, up 11.6% from $997.4 million through Sept. 30 last year. The company’s AFFO is up 11.7% this year, from $319.5 million through the third quarter last year to $360 million thus far this year.
“We are very pleased with the third quarter results, which turned out better than we had anticipated, thanks in part to a pick up in political spending and continued strength in our digital platform,” says Lamar CEO Sean Reilly in a prepared statement. “We expect to finish the year at the upper end of our previously provided AFFO guidance of $4.85 to $5 per share.”
