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What's in Store for Crown Castle (CCI) This Earnings Season?
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Crown Castle Inc. (CCI - Free Report) is scheduled to release third-quarter 2023 results on Oct 18 after the closing bell. In anticipation of the announcement, industry analysts and investors are eager to assess the company's performance and prospects in the current economic climate.
In the last reported quarter, this Houston, TX-based real estate investment trust’s (REIT) adjusted funds from operations (FFO) per share outpaced the Zacks Consensus Estimate by 3.02%. Results reflected better-than-anticipated revenues aided by robust site-rental revenue growth. However, the company lowered its outlook for 2023, citing that it expects a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers.
Over the preceding four quarters, CCI’s FFO per share surpassed estimates on three occasions and missed once, the average beat being 0.91%. This is depicted in the graph below:
Let’s see how things have shaped up before this announcement.
Factors to Note
In recent years, the advancement in mobile technology, such as 4G and 5G networks, and the proliferation of bandwidth-intensive applications have steered the growth in mobile data usage globally. Also, the rampant usage of network-intensive applications for video conferencing and cloud services and remote-working scenarios have fueled the rise. This has led to greater capital spending by wireless carriers due to incremental demand from global 4G and 5G deployment efforts, growing wireless penetration and spectrum auctions, aiding the demand for CCI’s wireless communication infrastructure.
Further, CCI’s solid balance sheet position is likely to have supported its small cell deployment efforts required to increase the capacity and density of the wireless network for 5G deployment.
However, according to management, the initial surge in tower activity related to the early stage of the 5G investment cycle has waned. As a result, management expected a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers. Moreover, the T-Mobile Sprint network rationalization is likely to weigh on the third quarter of 2023.
Amid these, our estimate for quarterly site rental revenues stands at $1.57 billion, implying only 0.4% growth year over year. We estimate revenues from the network services and other segment to decline 10.9% year over year during the quarter.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.71 billion, indicating a decrease of 2.28% from the year-ago reported number.
Also, high interest expenses are likely to have been a spoilsport for CCI during the to-be-reported quarter. We expect third-quarter 2023 interest expenses and amortization of deferred financing costs to rise 20.8% year over year.
Crown Castle’s activities in the quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has been revised 1.1% downward over the past month to $1.78. The figure also suggests a 3.78% decrease from the prior-year quarter’s reported figure.
Here Is What Our Quantitative Model Predicts:
Our proven model predicts a surprise in terms of FFO per share for Crown Castle this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is the case here.
Crown Castle currently has a Zacks Rank of 3 and an Earnings ESP of +0.70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks That Warrant a Look
Here are two other stocks from the broader REIT sector — Prologis (PLD - Free Report) and American Tower Corporation (AMT - Free Report) — you may want to consider as our model shows that these also have the right combination of elements to report a surprise this quarter.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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What's in Store for Crown Castle (CCI) This Earnings Season?
Crown Castle Inc. (CCI - Free Report) is scheduled to release third-quarter 2023 results on Oct 18 after the closing bell. In anticipation of the announcement, industry analysts and investors are eager to assess the company's performance and prospects in the current economic climate.
In the last reported quarter, this Houston, TX-based real estate investment trust’s (REIT) adjusted funds from operations (FFO) per share outpaced the Zacks Consensus Estimate by 3.02%. Results reflected better-than-anticipated revenues aided by robust site-rental revenue growth. However, the company lowered its outlook for 2023, citing that it expects a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers.
Over the preceding four quarters, CCI’s FFO per share surpassed estimates on three occasions and missed once, the average beat being 0.91%. This is depicted in the graph below:
Crown Castle Inc. Price and EPS Surprise
Crown Castle Inc. price-eps-surprise | Crown Castle Inc. Quote
Let’s see how things have shaped up before this announcement.
Factors to Note
In recent years, the advancement in mobile technology, such as 4G and 5G networks, and the proliferation of bandwidth-intensive applications have steered the growth in mobile data usage globally. Also, the rampant usage of network-intensive applications for video conferencing and cloud services and remote-working scenarios have fueled the rise. This has led to greater capital spending by wireless carriers due to incremental demand from global 4G and 5G deployment efforts, growing wireless penetration and spectrum auctions, aiding the demand for CCI’s wireless communication infrastructure.
Further, CCI’s solid balance sheet position is likely to have supported its small cell deployment efforts required to increase the capacity and density of the wireless network for 5G deployment.
However, according to management, the initial surge in tower activity related to the early stage of the 5G investment cycle has waned. As a result, management expected a decline in tower activity for the remainder of the year due to reduced network spending by wireless carriers. Moreover, the T-Mobile Sprint network rationalization is likely to weigh on the third quarter of 2023.
Amid these, our estimate for quarterly site rental revenues stands at $1.57 billion, implying only 0.4% growth year over year. We estimate revenues from the network services and other segment to decline 10.9% year over year during the quarter.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.71 billion, indicating a decrease of 2.28% from the year-ago reported number.
Also, high interest expenses are likely to have been a spoilsport for CCI during the to-be-reported quarter. We expect third-quarter 2023 interest expenses and amortization of deferred financing costs to rise 20.8% year over year.
Crown Castle’s activities in the quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the quarterly FFO per share has been revised 1.1% downward over the past month to $1.78. The figure also suggests a 3.78% decrease from the prior-year quarter’s reported figure.
Here Is What Our Quantitative Model Predicts:
Our proven model predicts a surprise in terms of FFO per share for Crown Castle this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is the case here.
Crown Castle currently has a Zacks Rank of 3 and an Earnings ESP of +0.70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks That Warrant a Look
Here are two other stocks from the broader REIT sector — Prologis (PLD - Free Report) and American Tower Corporation (AMT - Free Report) — you may want to consider as our model shows that these also have the right combination of elements to report a surprise this quarter.
Prologis is slated to report quarterly numbers on Oct 17. CCI has an Earnings ESP of +0.18% and presently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Tower Corporation is slated to report quarterly numbers on Oct 26. AMT presently has an Earnings ESP of + 0.94% and a Zacks Rank of 3.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.