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Why Is Crown Castle (CCI) Down 2.6% Since Last Earnings Report?
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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 2.6% 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 catalysts.
Crown Castle's Q4 AFFO and Revenues Beat Estimates
Crown Castle reported fourth-quarter 2023 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 reflected 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. Crown Castle maintained its outlook for 2024.
Net revenues of $1.67 billion 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 surpassed the Zacks Consensus Estimate of $6.96 billion. However, the reported figure declined marginally from the prior year.
Per Tony Melone, interim CEO of the company, “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.”
Quarter in Detail
During the fourth quarter, Crown Castle’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.
Crown Castle’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.
Site rental revenues are expected to be 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Crown Castle has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. 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 F. 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.
Performance of an Industry Player
Crown Castle belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, Prologis (PLD - Free Report) , has gained 5.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Prologis reported revenues of $1.76 billion in the last reported quarter, representing a year-over-year change of +10.4%. EPS of $0.68 for the same period compares with $1.24 a year ago.
For the current quarter, Prologis is expected to post earnings of $1.29 per share, indicating a change of +5.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.7% over the last 30 days.
Prologis has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Why Is Crown Castle (CCI) Down 2.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Crown Castle (CCI - Free Report) . Shares have lost about 2.6% 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 catalysts.
Crown Castle's Q4 AFFO and Revenues Beat Estimates
Crown Castle reported fourth-quarter 2023 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 reflected 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. Crown Castle maintained its outlook for 2024.
Net revenues of $1.67 billion 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 surpassed the Zacks Consensus Estimate of $6.96 billion. However, the reported figure declined marginally from the prior year.
Per Tony Melone, interim CEO of the company, “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.”
Quarter in Detail
During the fourth quarter, Crown Castle’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.
Crown Castle’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.
Site rental revenues are expected to be 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Crown Castle has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. 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 F. 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.
Performance of an Industry Player
Crown Castle belongs to the Zacks REIT and Equity Trust - Other industry. Another stock from the same industry, Prologis (PLD - Free Report) , has gained 5.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Prologis reported revenues of $1.76 billion in the last reported quarter, representing a year-over-year change of +10.4%. EPS of $0.68 for the same period compares with $1.24 a year ago.
For the current quarter, Prologis is expected to post earnings of $1.29 per share, indicating a change of +5.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.7% over the last 30 days.
Prologis has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.