Higher sales helped boost Baton Rouge-based Lamar Advertising Co.’s first-quarter adjusted funds from operations by more than 30 percent to $78.9 million, or 82 cents per share.
Adjusted funds from operations, or AFFO, is a measure that helps predict a real estate investment trust’s ability to pay dividends. Lamar converted to a trust in 2014. The trusts don’t pay income taxes on profits if at least 90 percent are paid to shareholders through dividends. A year ago, Lamar’s AFFO was $58.8 million, or 62 cents per share.
“We are encouraged by our first-quarter results, which have us tracking to the high end of our previously provided full-year goals for sales and AFFO,” said Lamar Chief Executive Officer Sean Reilly.
In March, Lamar said it expects AFFO for 2015 in the range of $417 million to $427 million, or $4.34 to $4.45 per share. Lamar’s stock closed up $1.55, or 2.7 percent, Wednesday at $58.96.
During the first quarter, Lamar limited expenses while building on its late-2014 sales momentum, Reilly said. Net revenue increased 6.2 percent to $302.5 million. The continued growth in local billboard sales, up 6.7 percent, also was a first-quarter highlight, Reilly said.
During a conference call with investors and stock analysts, Reilly said Lamar also enjoyed “extremely good performances” on the West Coast and along the Eastern Seaboard.
Meanwhile, confidence is higher than one might think in the Texas portions of the oil patch, he said.
Follow Ted Griggs on Twitter, @tedgriggsbr