Crown Castle (CCI) Misses on Q1 Earnings, Beats on Revenues - Analyst Blog
Crown Castle International Corporation CCI reported mixed financial numbers in the first quarter of 2015, wherein earnings lagged the Zacks Consensus Estimate while revenues beat the same.
The company reported earnings per share of 34 cents, a penny below the Zacks Consensus Estimate. However, net income increased 21.7% year over year to $125.1 million.
Crown Castle International Corporation - Earnings Surprise | FindTheCompany
Net revenue in the quarter increased 7.4% year over year to $940 million, outpacing the Zacks Consensus Estimate of $935 million. The beat came on the back of improved performance at both the Site Rental and the Network Services segments.
Gross margin in the first quarter was 64.9% compared with 65.6% in the year-ago quarter. Operating income stood at $262.9 million against $251.6 million in the prior-year quarter. Quarterly adjusted EBITDA was approximately $554 million, representing a year-over-year increase of 5%.
Cash Flow
During the first quarter of 2015, funds flow from operations (FFO) was $373.1 million versus $337.7 million in the prior-year quarter. FFO per share in the quarter stood at $1.12, up 10.9% year over year. Quarterly adjusted funds flow from operations (AFFO) was $383.3 million compared with $348.7 million in the first quarter of 2014. AFFO per share in the first quarter was $1.15 against $1.05 in the year-ago quarter.
Balance Sheet
At the end of the quarter under review, Crown Castle had cash and cash equivalents of approximately $240.2 million on its balance sheet compared with $175.6 million at the end of 2014. At the end of first quarter, debt and other long-term obligations totaled approximately $11,954.1 million versus $11,807.5 million at the end of 2014. The debt-to-capitalization ratio stood at 0.64 in comparison with 0.63 at the end of 2014.
Segment Discussion
Site Rental Segment
Quarterly revenues were $767.6 million, up 2.7% year over year. Gross margin for the segment was 68.6% compared with 69.5% in the prior-year quarter.
Network Services Segment
Quarterly revenues were $173.4 million, up 34.6% year over year. Gross margin for the segment was 48.7% versus 43.4% in the prior-year quarter.
Outlook for Second-Quarter 2015
For the second quarter, Crown Castle expects Site Rental revenues in the range of $767 million to $772 million. Site Rental cost of operation is projected in the band of $242 million to $247 million. Adjusted EBITDA is anticipated between $531 million and $536 million. Site Rental gross margin is expected in the band of $523–$528 million. Interest expense (inclusive of amortization) is estimated in the $133–$138 million range. Meanwhile, FFO is anticipated in the $352–$357 million band. AFFO is projected in the $348–$353 million range. Net income is forecasted at $92–$125 million or 28–37 cents per share. Net income attributable to CCIC common shareholders is estimated in the range of $80 to $117 or 24 to 35 cents.
Outlook for Full-Year 2015
For 2015, Crown Castle expects Site Rental revenues in the range of $3,067–$3,082 million. Site Rental cost of operation is projected in the $967–$982 million band. Site Rental gross margin is expected between $2,091 million and 2,106 million. Adjusted EBITDA is anticipated between $2,145 and $2,160 million. Interest expense (inclusive of amortization) is estimated in the $531–$536 million range. FFO is projected at $1,439–$1,454 million. AFFO is expected between $1,450 and $1,465 million. Net income is anticipated between $419 and $498 million or $1.26 and $1.49 per share. Net income attributable to CCIC common shareholders is estimated to be in the range of $381 to $467 million or $1.14 to $1.40.
Stocks to Consider
Crown Castle carries a Zacks Rank #3 (Hold). Better-ranked stocks in this sector include Gladstone Land Corporation LAND, Hudson Pacific Properties, Inc. HPP and Ryman Hospitality Properties, Inc. RHP. All these stocks sport a Zacks Rank #1 (Strong Buy).
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