Yahoo Finance Crown Castle's (CCI) Q1 AFFO Lags Estimates, Revenues Up Y/Y
Crown Castle Inc. CCI reported first-quarter 2023 adjusted funds from operations (AFFO) per share of $1.91, lagging the Zacks Consensus Estimate of $1.94.
Net revenues of $1.77 billion, too, missed the Zacks Consensus Estimate of $1.78 billion. Our estimate for the same was pegged at $1.79 billion.
Higher operating expenses in the quarter were a deterrent. However, the rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. The company maintained its outlook for 2023.
The reported AFFO per share compared favorably with the year-ago period’s $1.87. Net revenues improved 1.8% from the prior-year quarter’s $1.74 billion.
Per Jay Brown, chief executive officer of the company, “We continue to benefit from the growth in demand for connectivity and the development of 5G, resulting in positive operating trends and first quarter growth that was in line with our expectations.”
Quarter in Detail
During the first quarter, CCI’s site-rental revenues came in at $1.62 billion, up 3% year over year. The organic contribution of $85 million to the site rental revenues reflected 6.4% growth. When adjusted for the impact of Sprint cancellations, organic contribution to site rental revenues represented 2.9% growth. Our estimate for site-rental revenues was pegged at $1.63 billion.
Services and other revenues fell 10.2% year over year to $149 million. We estimated the same to be $160.8 million.
CCI’s quarterly operating expenses increased 1.9% year over year to $1.15 billion. The operating income climbed 1.6% to $628 million. The quarterly adjusted EBITDA of $1.1 billion improved marginally year over year.
Crown Castle reported capital expenditures of $341 million in the quarter. This comprised discretionary capital expenditures of $326 million and sustaining capital expenditures of $15 million. Discretionary capital expenditures primarily attributable to Fiber were around $272 million, and that to Towers was roughly $48 million.
Balance Sheet
Crown Castle exited first-quarter 2023 with cash and cash equivalents of $187 million, up from $156 million reported as of Dec 31, 2022.
Moreover, debt and other long-term obligations aggregated $21.5 billion, up from $20.9 billion as of Dec 31, 2022.
2023 Guidance
Crown Castle maintained its guidance for 2023.
It expects AFFO per share in the range of $7.58-$7.68. The Zacks Consensus Estimate for the same is pegged at $7.64, which lies within the guided range.
Site rental revenues are expected to lie between $6.488 billion and $6.533 billion while the adjusted EBITDA is projected in the range of $4.449 billion-$4.494 billion.
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.
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, Inc. ARE and Boston Properties BXP, slated to report on Apr 24 and Apr 25, respectively. Equinix EQIX is scheduled on May 3.
The Zacks Consensus Estimate for Alexandria’s first-quarter 2023 FFO per share is pegged at $2.15, implying a year-over-year increase of 4.9%. ARE currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for Boston Properties’ quarterly FFO per share stands at $1.70, indicating a year-over-year fall of 6.6%. BXP currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Equinix’s first-quarter 2023 FFO per share is pegged at $7.88, suggesting a year-over-year increase of 10.1%. EQIX currently carries a Zacks Rank #2 (Buy).
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
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