Crown Castle International Inc. ( CCI - Analyst Report ) is slated to release its fourth quarter 2011 results on Wednesday, January 25, after the closing bell. The current Zacks Consensus Estimate for the fourth quarter is pegged at 17 cents, representing an annualized growth of 39.58%.

With respect to earnings surprise over the trailing four quarters, Crown Castle has outperformed the Zacks Consensus Estimate in three of the last four quarters. The average earnings surprise was a positive 31.88%, implying that the company has outdone the Zacks Consensus Estimate by the same magnitude over the last four quarters.

Third-Quarter Performance

On October 26, 2011, AMT declared its third quarter fiscal 2011 financial results that outdid the Zacks Consensus Estimates. Quarterly GAAP net income was approximately $43.7 million or 15 cents per share compared with a net loss of $140.2 million or a loss of 49 cents per share in the year-ago quarter. Third-quarter 2011 EPS of 15 cents was well above the Zacks Consensus Estimate of 12 cents.

Net revenue in the reported quarter was $513.9 million, up 6.6% year over year, exceeding the Zacks Consensus Estimate of $507 million. This was mainly due to improved performance by the Site Rental segment.

Gross margin in the reported quarter was 71.4% compared with 70.3% in the year-ago quarter. Operating income was $181.9 million compared with $156 million in the prior-year quarter.

Agreement of Estimate Revisions

Of the 16 analysts covering the stock in the last 30 days, only one analyst revised the estimate upward for the fourth quarter of 2011 while one moved in the opposite direction for the same period.

In the last 30 days, none out of the 11 analysts revised their estimates for the first quarter of 2012.

However, for fiscal 2011, out of the 16 analysts covering the stock, one analyst increased the EPS estimate but another analyst slashed the estimate over the last 30 days. For fiscal 2012, none of the14 analysts revised their estimates in the last 7 days.

Magnitude of Estimate Revisions

Relative to these revisions of estimates, the current Zacks Consensus Estimate remained flat at 17 cents for the fourth quarter of 2011 as well as first quarter 2012. For fiscal 2011, during the last 30 days, the current Zacks Consensus Estimate was just a penny above the previous estimate of 53 cents. However, for fiscal 2012, the current Zacks Consensus Estimate was just a penny short of the earlier estimate of 82 cents.

Earning Surprises

The current Zacks Consensus Estimates for the ongoing quarter for Crown Castle contains 0.00% upside potential but the upcoming quarter is reflecting a 5.88% downside risk (essentially a proxy for future earning surprises). Likewise, for fiscal 2011, the Zacks Consensus Estimates growth potential is 1.85% and for fiscal 2012, the downside potential is 4.94%.

Our Recommendation

Despite huge debt and stiff competition from American Tower Corp. ( AMT - Analyst Report ) , we believe that strong financial outlook and continuous acquisition of towers coupled with increased roll outs of 3G/4G high speed mobile voice, data, and video technology and higher smartphone usage will act as positive catalysts for the stock, going forward.

We, maintain our long-term Outperform recommendation on Crown Castle. Currently, Crown Castle holds a Zacks #3 Rank, implying a short-term Hold rating.