Crown Castle Maintains a Buy

We maintain our Buy rating and the same valuation target for Crown Castle International Corp. (CCI - Analyst Report), a leading operator of wireless communications towers in the U.S.A and Australia, following its mixed financial results of 4th quarter 2008. Revenue was well above our estimates due to rapid growth of wireless data services. Net income, however, was below our forecasts -- mainly a result of higher impairment charges for financial investments.

Crown Castle performed well with respect to several parameters, including site rental revenue, gross margin, adjusted EBITDA and recurring cash flow. Financial results are expected to be driven by substantial demand for more tower space to facilitate high-speed 3G networks.

Our long-term view regarding the wireless tower industry remains positive. On the other hand, the level of outstanding debt remains a concern, and we believe the recent stock valuation weakness may be attributed to the leveraged balance sheet with higher debt-servicing costs.

Nalak Das contributed to this report.