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Crown Castle's (CCI) Q4 FFO and Revenues Miss Estimates

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Crown Castle International Corp. (CCI - Free Report) reported fourth-quarter 2019 adjusted funds from operations (FFO) per share of $1.38, down 0.7% year over year. Further, the reported figure missed the Zacks Consensus Estimate of $1.48.

Net revenues for the reported quarter of $1.43 billion missed the Zacks Consensus Estimate of $1.48 billion. However, the figure inched up 1.6% year over year.

The year-on-year revenue increase reflects growth in site-rental revenues. However, services and other revenues were down during the quarter. Management also noted that there was a “noticeable slowdown in activity” in the fourth quarter.

For full-year 2019, Crown Castle reported adjusted FFO per share of $5.69, reflecting an increase of 6% from the prior year’s $5.37. Revenues for the year came in at $5.8 billion, up 7.4% year on year.

Quarter in Detail

Site-rental revenues came in at around $1.3 billion, up 5.6% year over year. The $71 million in organic contribution to site rental revenues represents 5.9% growth, driven by new leasing activity, as well as contracted tenant escalations. Services and other revenues were down 26.4% year over year to $128 million.

Quarterly operating income increased 3.6% year over year to $379 million. However, operating expenses flared up 1% year over year to $1.05 billion. Quarterly adjusted EBITDA of $818 million marked year-over-year growth of 1.9%.

Balance Sheet

Crown Castle exited fourth-quarter 2019 with cash and cash equivalents of $196 million, down from the $277 million reported at the end of 2018.

Furthermore, as of Dec 31, 2019, the company generated $2.7 billion of net cash from operating activities compared with the $2.5 billion reported in the year-ago period.

Also, debt and other long-term obligations aggregated $18 billion, up from the $16.6 billion witnessed at the end of 2018.

2020 Outlook

Crown Castle has updated its outlook for 2020 to reflect the impact of the restatement of the previously-issued financial statements. The company now expects site-rental revenues of $5,337-$5,382 million, reflecting a $141-million increase at the mid-point. Adjusted EBITDA is projected at $3,479-$3,524 million, indicating a $90-million decline at the mid-point. Adjusted FFO is projected at $2,572-$2,617 million, suggesting a $90-million slump at the mid-point.
 

Crown Castle currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Prologis, Inc. (PLD - Free Report) currently carries a Zacks Rank of 2. The company’s FFO per share estimate for 2020 has been revised 2.5% upward to $3.72 in a month’s time. The stock has rallied 30% in 12 months’ time.

Highwoods Properties’ (HIW - Free Report) Zacks Consensus Estimate for the current-year FFO per share has moved marginally upward to $3.63 over the past month. Shares of this Zacks #2 Ranked company have gained 7% over the past year.

Piedmont Office Realty Trust, Inc. (PDM - Free Report) also carries a Zacks Rank of 2, currently. The company’s ongoing-year FFO per share estimate moved 3.2% north to $1.96 in a month’s time. The stock has rallied 13.21% in the past 12 months.

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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