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Crown Castle International Inc. (CCI - Analyst Report) is slated to release its second quarter 2012 results on Wednesday, July 25, after the closing bell. The current Zacks Consensus Estimate for the second quarter is pegged at 39 cents, representing an annualized growth of 328.65%.

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 6.96%, implying that the company has outdone the Zacks Consensus Estimate by the same magnitude in three out of the last four quarters.

First-Quarter Performance

On April 25, 2012, CCI declared its financial results for the first quarter of fiscal 2012. The results were in line with the Zacks Consensus Estimates. Quarterly GAAP net income was approximately $50.3 million or 17 cents per share compared with a net income of $40 million or 12 cents per share in the year-ago quarter. First-quarter 2012 EPS of 17 cents was in line with the Zacks Consensus Estimate.

Net revenue in the reported quarter was $551.7 million, up 10.6% year over year, exceeding the Zacks Consensus Estimate of $521 million. This growth was primarily attributable to improved performance in the Site Rental segment.

Gross margin in the reported quarter was 72.0% compared with 70.8% in the year-ago quarter. Operating income was $202.2 million compared with $166.4 million in the prior-year quarter.

Agreement of Estimate Revisions

Of the 19 analysts covering the stock in the last 30 days, none of the analysts revised the estimate upward for the second quarter of 2012. Likewise, out of the 18 analysts covering the stock, none revised their estimates for the third quarter of 2012.

However, for fiscal 2012, out of the 19 analysts covering the stock, one analyst increased the EPS estimate but none moved in the opposite direction, over the last 30 days. For fiscal 2013, none of the19 analysts revised their estimates in the last 30 days.

Magnitude of Estimate Revisions

Due to lack of any estimate revisions, the current Zacks Consensus Estimates for the current and the next quarter of fiscal 2012 has remained stable over the last 30 days, at 39 cents and 11 cents, respectively.

For fiscal 2012 and 2013, the current Zacks Consensus Estimate was flat compared with earlier estimates of $0.79 and $1.01, respectively.

Earning Surprises

The current Zacks Consensus Estimates for Crown Castle contains a 7.69% upside potential but the upcoming quarter is reflecting a 9.09% downside risk (essentially a proxy for future earning surprises). Likewise, for fiscal 2012, the Zacks Consensus Estimates contains a growth potential of 2.53% and for fiscal 2013, the downside potential is 2.97%.

Our Recommendation

Despite huge debt, and stiff competition from American Tower Corp. (AMT - Analyst Report) and SBA Communications Corp. (SBAC - Snapshot 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 adaptation of smartphones will act as positive catalysts for the stock, going forward.

We, maintain our long-term Neutral recommendation on Crown Castle. Currently, Crown Castle holds a Zacks #1 Rank, implying a short-term Strong Buy rating.

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