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Crown Castle's (CCI) Q4 AFFO Beat Estimate, Revenues Down Y/Y
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Crown Castle Inc. (CCI - Free Report) reported fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $1.82, outpacing the Zacks Consensus Estimate of $1.79. However, the reported figure declined 1.6% from the year-ago quarter.
Results reflect better-than-anticipated revenues aided by healthy site-rental revenue growth. However, higher interest expense on debt obligations and lower contributions from adjusted EBITDA were undermining factors. CCI maintained its outlook for 2024.
Net revenues of $1.67 billion, too, beat the Zacks Consensus Estimate of $1.65 billion. However, the figure fell 5.1% year over year.
In 2023, Crown Castle reported AFFO per share of $7.55, beating the Zacks Consensus Estimate of $7.52. Moreover, the figure increased 2.3% from the prior year’s $7.38. Net revenues of $6.98 billion declined marginally from the prior year. However, the reported figure beat the Zacks Consensus Estimate of $6.96 billion.
Per Tony Melone, interim CEO of the company, “Crown Castle delivered 2023 results in line with our expectations, including site rental billings, Adjusted EBITDA, and AFFO. We generated full-year tower organic revenue growth of 5%, achieved 8,000 new small cell nodes for the year, with 2,000 additional nodes completed that are expected to begin billing in first-quarter 2024, and returned to year-over-year fiber solutions revenue growth of approximately 3% in the fourth quarter. Looking forward, my focus is on delivering on our 2024 Outlook and continuing to serve our customers with excellence while at the same time supporting the ongoing strategic review of our Fiber business and providing stability through our CEO transition period.”
Quarter in Detail
During the fourth quarter, CCI’s site-rental revenues came in at $1.60 billion, up 1.6% from the prior-year quarter. The organic contribution of $70 million to the site rental billings reflected 5.2% growth and was not materially impacted by the Sprint Cancellations. Our estimate for site-rental revenues was pegged at $1.57 billion.
On the other hand, services and other revenues plunged 61.8% year over year to $71 million. We estimated the metric to be $80.5 million.
CCI’s quarterly operating expenses decreased 5.7% year over year to $1.09 billion. The operating income fell to $586 million from $610 million recorded a year ago. The quarterly adjusted EBITDA of $1.08 billion slipped 1.3%.
Interest expense on debt obligations rose 16.4% year over year to $220 million.
The company reported capital expenditures of $357 million in the quarter. This comprised discretionary capital expenditures of $329 million and sustaining capital expenditures of $28 million. Discretionary capital expenditures primarily attributable to Fiber were around $288 million, and those to Towers were roughly $34 million.
Balance Sheet
Crown Castle exited the fourth quarter of 2023 with cash and cash equivalents of $105 million, down from $117 million reported as of Sep 30, 2023.
Moreover, debt and other long-term obligations aggregated $22.09 billion as of Dec 31, 2023, increasing nearly 1% sequentially.
2024 Guidance
Crown Castle maintained its guidance for 2024 AFFO per share in the range of $6.85-$6.97. The Zacks Consensus Estimate is pegged at $6.96, which is within the guided range.
Site rental revenues are expected to lie between $6.347 billion and $6.392 billion, while the adjusted EBITDA is estimated to be in the band of $4.138-$4.188 billion.
Crown Castle currently carries a Zacks Rank #3 (Hold).
Crown Castle Inc. Price, Consensus and EPS Surprise
We now look forward to the earnings releases of other REITs like Alexandria Real Estate Equities (ARE - Free Report) and Boston Properties (BXP - Free Report) , slated to report on Jan 29 and Jan 30, respectively. Meanwhile, Ventas (VTR - Free Report) is scheduled for Feb 8.
The Zacks Consensus Estimate for Boston Properties’ fourth-quarter 2023 FFO per share is pegged at $1.81, suggesting a year-over-year fall of 2.7%. BXP currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for Ventas’ fourth-quarter 2023 FFO per share stands at 76 cents, indicating a 4.1% rise year over year. VTR currently has a Zacks Rank #2 (Buy).
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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Crown Castle's (CCI) Q4 AFFO Beat Estimate, Revenues Down Y/Y
Crown Castle Inc. (CCI - Free Report) reported fourth-quarter 2023 adjusted funds from operations (AFFO) per share of $1.82, outpacing the Zacks Consensus Estimate of $1.79. However, the reported figure declined 1.6% from the year-ago quarter.
Results reflect better-than-anticipated revenues aided by healthy site-rental revenue growth. However, higher interest expense on debt obligations and lower contributions from adjusted EBITDA were undermining factors. CCI maintained its outlook for 2024.
Net revenues of $1.67 billion, too, beat the Zacks Consensus Estimate of $1.65 billion. However, the figure fell 5.1% year over year.
In 2023, Crown Castle reported AFFO per share of $7.55, beating the Zacks Consensus Estimate of $7.52. Moreover, the figure increased 2.3% from the prior year’s $7.38. Net revenues of $6.98 billion declined marginally from the prior year. However, the reported figure beat the Zacks Consensus Estimate of $6.96 billion.
Per Tony Melone, interim CEO of the company, “Crown Castle delivered 2023 results in line with our expectations, including site rental billings, Adjusted EBITDA, and AFFO. We generated full-year tower organic revenue growth of 5%, achieved 8,000 new small cell nodes for the year, with 2,000 additional nodes completed that are expected to begin billing in first-quarter 2024, and returned to year-over-year fiber solutions revenue growth of approximately 3% in the fourth quarter. Looking forward, my focus is on delivering on our 2024 Outlook and continuing to serve our customers with excellence while at the same time supporting the ongoing strategic review of our Fiber business and providing stability through our CEO transition period.”
Quarter in Detail
During the fourth quarter, CCI’s site-rental revenues came in at $1.60 billion, up 1.6% from the prior-year quarter. The organic contribution of $70 million to the site rental billings reflected 5.2% growth and was not materially impacted by the Sprint Cancellations. Our estimate for site-rental revenues was pegged at $1.57 billion.
On the other hand, services and other revenues plunged 61.8% year over year to $71 million. We estimated the metric to be $80.5 million.
CCI’s quarterly operating expenses decreased 5.7% year over year to $1.09 billion. The operating income fell to $586 million from $610 million recorded a year ago. The quarterly adjusted EBITDA of $1.08 billion slipped 1.3%.
Interest expense on debt obligations rose 16.4% year over year to $220 million.
The company reported capital expenditures of $357 million in the quarter. This comprised discretionary capital expenditures of $329 million and sustaining capital expenditures of $28 million. Discretionary capital expenditures primarily attributable to Fiber were around $288 million, and those to Towers were roughly $34 million.
Balance Sheet
Crown Castle exited the fourth quarter of 2023 with cash and cash equivalents of $105 million, down from $117 million reported as of Sep 30, 2023.
Moreover, debt and other long-term obligations aggregated $22.09 billion as of Dec 31, 2023, increasing nearly 1% sequentially.
2024 Guidance
Crown Castle maintained its guidance for 2024 AFFO per share in the range of $6.85-$6.97. The Zacks Consensus Estimate is pegged at $6.96, which is within the guided range.
Site rental revenues are expected to lie between $6.347 billion and $6.392 billion, while the adjusted EBITDA is estimated to be in the band of $4.138-$4.188 billion.
Crown Castle currently carries a Zacks Rank #3 (Hold).
Crown Castle Inc. Price, Consensus and EPS Surprise
Crown Castle Inc. price-consensus-eps-surprise-chart | Crown Castle Inc. Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other REITs like Alexandria Real Estate Equities (ARE - Free Report) and Boston Properties (BXP - Free Report) , slated to report on Jan 29 and Jan 30, respectively. Meanwhile, Ventas (VTR - Free Report) is scheduled for Feb 8.
The Zacks Consensus Estimate for Alexandria’s fourth-quarter 2023 FFO per share is pegged at $2.29, implying a 7% year-over-year increase. ARE currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Boston Properties’ fourth-quarter 2023 FFO per share is pegged at $1.81, suggesting a year-over-year fall of 2.7%. BXP currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for Ventas’ fourth-quarter 2023 FFO per share stands at 76 cents, indicating a 4.1% rise year over year. VTR currently has a Zacks Rank #2 (Buy).
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.