Key Points
American Tower beat Wall Street's sales and adjusted funds from operations (AFFO) targets in Q3.
The company also raised its full-year performance targets.
Some investors were looking for an even stronger beat-and-raise quarter.
American Tower (NYSE: AMT) stock is losing ground Tuesday trading. The company's share price was down 3.5% as of 2 p.m. ET. The sell-off came despite the S&P 500 (SNPINDEX: ^GSPC) being up 0.3% at the same point in the day's trading.
American Tower released its third-quarter results before the market opened this morning and reported sales and operating funds for the period that beat the market's expectations. The real estate investment trust (REIT) also raised its full-year guidance, but that hasn't been enough to stop the stock from losing ground today.
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American Tower stock is slipping despite Q3 beats
American Tower posted non-GAAP (generally accepted accounting principles) adjusted funds from operations (AFFO) of $2.78, on revenue of $2.72 billion in the third quarter. AFFO came in $0.32 ahead of the average Wall Street analyst target, and sales beat the average analyst target by $60 million.
Total revenue for the quarter was up 7.7% year over year, and total property revenue for the period was up 5.9% compared to last year's quarter. Meanwhile, AFFO was up 5.3% year over year to roughly $1.3 billion. The performance beats in the quarter were aided by demand connected to artificial intelligence (AI) and data centers.
What's next for American Tower?
Along with its Q3 report, American Tower raised its performance targets for this year. The company now expects property revenue to be between $10.21 billion and $10.29 billion -- representing an increase of $40 million at the midpoint of the guidance range.
Meanwhile, AFFO attributable to common stockholder is now projected to come in between $10.60 per share and $10.72 per share. At the midpoint, the new AFFO guidance represents a $0.10-per-share improvement over the previous forecast.
Despite the beat-and-raise quarter, some investors were apparently hoping for stronger outperformance in light of the company's heavy investments in data center technologies. But while the market is having a negative reaction today, American Tower's Q3 report generally suggested solid momentum for the business.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Tower. The Motley Fool recommends the following options: long January 2026 $180 calls on American Tower and short January 2026 $185 calls on American Tower. The Motley Fool has a disclosure policy.