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Crown Castle (CCI) Down 9.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Crown Castle (CCI - Free Report) . Shares have lost about 9.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Crown Castle due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Crown Castle’s Q4 FFO & Revenues Beat on Solid Demand
Crown Castle reported fourth-quarter 2022 adjusted funds from operations (AFFO) per share of $1.85, beating the Zacks Consensus Estimate of $1.83.
The net revenues of $1.76 billion, too, exceeded the Zacks Consensus Estimate of $1.75 billion. Our estimate for the same was pegged at $1.75 billion.
Reported AFFO per share compared favorably with the year-ago period’s $1.77. Net revenues climbed 6.6% from the prior-year quarter’s $1.65 billion.
The rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. It maintained its outlook for 2023.
In 2022, Crown Castle reported AFFO per share of $7.38, beating the Zacks Consensus Estimate of $7.36. Moreover, the figure increased 6.2% from the prior year’s $6.95. Net revenues of $6.98 billion improved 10.2% from the prior year’s $6.34 billion. Moreover, the reported figure beat the Zacks Consensus Estimate of $6.97 billion.
Per Jay Brown, chief executive officer of the company, “We generated significant growth in 2022, highlighted by nearly 6.5% organic revenue growth in our Towers segment and more than 9% dividend per share growth. Our ability to deliver strong bottom-line growth in 2022 while navigating a challenging environment with increasing interest rates reflects solid operational performance by our team and the deliberate actions we have taken over the years to reduce the risk profile of our strategy.”
Quarter in Detail
During the fourth quarter, CCI’s site-rental revenues came in at $1.58 billion, up 7.1% year over year. The organic contribution of $57 million to the site rental revenues reflected 4.3% growth. Our estimate for site-rental revenues was pegged at $1.57 billion. Furthermore, services and other revenues climbed 3.3% to $186 million. We estimated the same to be $185.5 million.
CCI’s quarterly operating expenses increased 1.9% year over year to $1.15 billion. The operating income climbed 16.8% to $610 million. The quarterly adjusted EBITDA of $1.1 billion marked a 10.8% year-over-year increase primarily due to growth in site rental revenues and higher services contribution.
Crown Castle reported capital expenditures of $389 million in the quarter. This comprised discretionary capital expenditures of $359 million and sustaining capital expenditures of $30 million. Discretionary capital expenditures primarily attributable to Fiber were around $307 million, and that to Towers was roughly $45 million.
Balance Sheet
Crown Castle exited fourth-quarter 2022 with cash and cash equivalents of $156 million, down from $174 million reported as of Sep 30, 2022.
Moreover, debt and other long-term obligations aggregated $20.9 billion, up from $20.7 billion witnessed as of Sep 30, 2022.
2023 Guidance
Crown Castle maintained its guidance for 2023.
It expects AFFO per share in the range of $7.58-$7.68.
Site rental revenues are expected to lie between $6.488 billion and $6.533 billion while the adjusted EBITDA is projected in the band of $4.449 billion-$4.494 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Crown Castle has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Crown Castle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Crown Castle (CCI) Down 9.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Crown Castle (CCI - Free Report) . Shares have lost about 9.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Crown Castle due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Crown Castle’s Q4 FFO & Revenues Beat on Solid Demand
Crown Castle reported fourth-quarter 2022 adjusted funds from operations (AFFO) per share of $1.85, beating the Zacks Consensus Estimate of $1.83.
The net revenues of $1.76 billion, too, exceeded the Zacks Consensus Estimate of $1.75 billion. Our estimate for the same was pegged at $1.75 billion.
Reported AFFO per share compared favorably with the year-ago period’s $1.77. Net revenues climbed 6.6% from the prior-year quarter’s $1.65 billion.
The rise in site-rental revenues amid elevated tower space demand aided CCI’s year-over-year top-line growth. It maintained its outlook for 2023.
In 2022, Crown Castle reported AFFO per share of $7.38, beating the Zacks Consensus Estimate of $7.36. Moreover, the figure increased 6.2% from the prior year’s $6.95. Net revenues of $6.98 billion improved 10.2% from the prior year’s $6.34 billion. Moreover, the reported figure beat the Zacks Consensus Estimate of $6.97 billion.
Per Jay Brown, chief executive officer of the company, “We generated significant growth in 2022, highlighted by nearly 6.5% organic revenue growth in our Towers segment and more than 9% dividend per share growth. Our ability to deliver strong bottom-line growth in 2022 while navigating a challenging environment with increasing interest rates reflects solid operational performance by our team and the deliberate actions we have taken over the years to reduce the risk profile of our strategy.”
Quarter in Detail
During the fourth quarter, CCI’s site-rental revenues came in at $1.58 billion, up 7.1% year over year. The organic contribution of $57 million to the site rental revenues reflected 4.3% growth. Our estimate for site-rental revenues was pegged at $1.57 billion. Furthermore, services and other revenues climbed 3.3% to $186 million. We estimated the same to be $185.5 million.
CCI’s quarterly operating expenses increased 1.9% year over year to $1.15 billion. The operating income climbed 16.8% to $610 million. The quarterly adjusted EBITDA of $1.1 billion marked a 10.8% year-over-year increase primarily due to growth in site rental revenues and higher services contribution.
Crown Castle reported capital expenditures of $389 million in the quarter. This comprised discretionary capital expenditures of $359 million and sustaining capital expenditures of $30 million. Discretionary capital expenditures primarily attributable to Fiber were around $307 million, and that to Towers was roughly $45 million.
Balance Sheet
Crown Castle exited fourth-quarter 2022 with cash and cash equivalents of $156 million, down from $174 million reported as of Sep 30, 2022.
Moreover, debt and other long-term obligations aggregated $20.9 billion, up from $20.7 billion witnessed as of Sep 30, 2022.
2023 Guidance
Crown Castle maintained its guidance for 2023.
It expects AFFO per share in the range of $7.58-$7.68.
Site rental revenues are expected to lie between $6.488 billion and $6.533 billion while the adjusted EBITDA is projected in the band of $4.449 billion-$4.494 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Crown Castle has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Crown Castle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.