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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 fourth-quarter and full-year 2023 results on Jan 24 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 missed the Zacks Consensus Estimate by 0.56%. Results reflected lower-than-anticipated revenues. Higher interest expenses and lower contributions from adjusted EBITDA were undermining factors.
Over the preceding four quarters, CCI’s FFO per share surpassed estimates on two occasions for as many missed, the average beat being 0.50%. This is depicted in the graph below:
Let’s see how things have shaped up before this announcement.
Factors to Note
The advancements in mobile technology, particularly 4G and 5G networks, coupled with the widespread use of bandwidth-intensive applications like video conferencing and cloud services in recent years, have propelled global mobile data usage. The surge in demand has led wireless carriers to increase capital spending, driven by efforts in deploying 4G and 5G networks, expanding wireless penetration and participating in spectrum auctions, consequently boosting the demand for CCI's wireless communication infrastructure.
Also, its 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, 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 in 2023.
Amid these, our estimate for quarterly site rental revenues stands at $1.57 billion, implying 0.7% decline year over year. We estimate revenues from the network services and other segment to decline significantly year over year to $80.5 million.
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.65 billion, indicating a decrease of 6.56% 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 fourth-quarter 2023 interest expenses and amortization of deferred financing costs to rise 12.5% 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 remained unrevised at $1.79 over the past month. The figure also suggests a 3.24% decrease from the prior-year quarter’s reported figure.
For full year 2023, Crown Castle expected its guidance for adjusted FFO per share in the range of $7.50-$7.58. The company projected its site rental revenues between $6.488 billion and $6.533 billion and adjusted EBITDA in the band of $4.399-$4.444 billion.
For the full year, the Zacks Consensus Estimate for FFO per share has been unrevised at $7.52 over the past month. However, the figure indicates a 1.9% increase from the year-ago reported figure. The Zacks Consensus Estimate for 2023 revenues is pegged at $6.96 billion, indicating only a decrease of 0.44% from the year-ago reported number.
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 +1.28%. 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 three other stocks from the broader REIT sector — Welltower Inc. (WELL - Free Report) , VICI Properties Inc. (VICI - Free Report) and Kimco Realty Corporation (KIM - 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 fourth-quarter and full-year 2023 results on Jan 24 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 missed the Zacks Consensus Estimate by 0.56%. Results reflected lower-than-anticipated revenues. Higher interest expenses and lower contributions from adjusted EBITDA were undermining factors.
Over the preceding four quarters, CCI’s FFO per share surpassed estimates on two occasions for as many missed, the average beat being 0.50%. 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
The advancements in mobile technology, particularly 4G and 5G networks, coupled with the widespread use of bandwidth-intensive applications like video conferencing and cloud services in recent years, have propelled global mobile data usage. The surge in demand has led wireless carriers to increase capital spending, driven by efforts in deploying 4G and 5G networks, expanding wireless penetration and participating in spectrum auctions, consequently boosting the demand for CCI's wireless communication infrastructure.
Also, its 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, 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 in 2023.
Amid these, our estimate for quarterly site rental revenues stands at $1.57 billion, implying 0.7% decline year over year. We estimate revenues from the network services and other segment to decline significantly year over year to $80.5 million.
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.65 billion, indicating a decrease of 6.56% 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 fourth-quarter 2023 interest expenses and amortization of deferred financing costs to rise 12.5% 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 remained unrevised at $1.79 over the past month. The figure also suggests a 3.24% decrease from the prior-year quarter’s reported figure.
For full year 2023, Crown Castle expected its guidance for adjusted FFO per share in the range of $7.50-$7.58. The company projected its site rental revenues between $6.488 billion and $6.533 billion and adjusted EBITDA in the band of $4.399-$4.444 billion.
For the full year, the Zacks Consensus Estimate for FFO per share has been unrevised at $7.52 over the past month. However, the figure indicates a 1.9% increase from the year-ago reported figure. The Zacks Consensus Estimate for 2023 revenues is pegged at $6.96 billion, indicating only a decrease of 0.44% from the year-ago reported number.
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 +1.28%. 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 three other stocks from the broader REIT sector — Welltower Inc. (WELL - Free Report) , VICI Properties Inc. (VICI - Free Report) and Kimco Realty Corporation (KIM - 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.
Welltower is slated to report quarterly numbers on Feb 13. WELL has an Earnings ESP of +1.06% and carries a Zacks Rank of 3 presently. You can see the complete list of today’s Zacks #1 Rank stocks here.
VICI Properties, scheduled to report quarterly numbers on Feb 22, has an Earnings ESP of +2.16% and carries a Zacks Rank of 2.
Kimco Realty, slated to release quarterly numbers on Feb 8, has an Earnings ESP of +2.56% and carries a Zacks Rank of 2 at present.
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.