It has been about a month since the last earnings report for Crown Castle (CCI Quick QuoteCCI - Free Report) . Shares have added about 5.4% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Crown Castle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Crown Castle Beats on Q3 FFO & Revenues, Hikes Dividend

Crown Castle reported third-quarter 2022 adjusted FFO (AFFO) per share of $1.85, beating the Zacks Consensus Estimate of $1.83.

The net revenues of $1.75 billion, too, exceeded the Zacks Consensus Estimate of $1.74 billion.

Reported AFFO per share compared favorably with the year-ago period’s $1.77. Net revenues climbed 7.9% from the prior-year quarter’s $1.62 billion.

The rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. It also announced a hike in its quarterly cash dividend payment.

Per Jay Brown, chief executive officer of the company, “We delivered strong results in the third quarter and increased our annualized common stock dividend by 6.5% to $6.26 per share. I believe we remain in the early stages of 5G development in the U.S., providing a long runway of growth in demand for our comprehensive communications infrastructure offering across towers, small cells and fiber.”

Quarter in Detail

During the third quarter, CCI’s site-rental revenues came in at $1.57 billion, up 8.1% year over year. The organic contribution of $67 million to the site rental revenues reflected 5.3% growth. Furthermore, services and other revenues climbed 6.6% to $178 million.

CCI’s quarterly operating expenses increased 4.8% year over year to $1.14 billion. The operating income climbed 14.4% to $602 million. The quarterly adjusted EBITDA of $1.1 billion marked a 10.3% year-over-year increase primarily due to growth in site rental revenues and higher services contribution.

Crown Castle reported capital expenditures of $337 million in the quarter. This comprised discretionary capital expenditures of $314 million and sustaining capital expenditures of $23 million. Discretionary capital expenditures primarily attributable to Fiber were around $267 million, and that to Towers was roughly $42 million.

Balance Sheet

Crown Castle exited third-quarter 2022 with cash and cash equivalents of $174 million, down from $281 million reported as of Jun 30, 2022.

Debt and other long-term obligations aggregated $20.7 billion, down from $21.2 billion witnessed as of Jun 30, 2022.

Guidance

Crown Castle maintained its outlook for 2022.

It expects AFFO per share in the range of $7.31-$7.41.

Site rental revenues are expected to lie between $6.242 billion and $6.287 billion while the adjusted EBITDA is projected in the band of $4.329-$4.374 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Crown Castle has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Crown Castle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.