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Crown Castle's (CCI) Q1 FFO Meets Estimates, View Intact

Zacks Equity Research
·3 min read

Crown Castle International Corp.’s CCI first-quarter 2020 adjusted funds from operations (FFO) per share of $1.42 came in line with the Zacks Consensus Estimate. The figure also comes in a cent higher than the prior-year quarter tally.

Net revenues of $1.42 billion inched up 0.9% year on year for the reported quarter. However, the figure missed the Zacks Consensus Estimate of $1.45 billion.

The year-on-year revenue increase reflects growth in site-rental revenues. However, services and other revenues were down during the quarter. The company also maintained the current-year outlook despite the prevailing uncertainties due to the coronavirus pandemic.

Additionally, the company issued $1.25 billion in senior unsecured notes with a weighted average maturity of 18 years in April.

Quarter in Detail

Site-rental revenues came in at $1.3 billion, up 5.5% year over year. The $71 million in organic contribution to site rental revenues reflects 5.8% growth on new leasing activities and as contracted tenant escalations. However, services and other revenues plunged 33.1% year over year to $111 million.

Quarterly operating income decreased 0.8% year over year to $364 million. However, operating expenses flared up 1.5% year over year to $1.1 billion. Quarterly adjusted EBITDA of $814 million marked year-over-year growth of 1.2%.

The company reported capital expenditures of $447 million during the quarter. This included $13 million of discretionary land purchases, $21 million of sustaining capital expenditures and $413 million of discretionary capital expenditures.

Balance Sheet

Crown Castle exited first-quarter 2020 with cash and cash equivalents of $310 million, up from the $196 million reported at the end of 2019.

Furthermore, as of Mar 31, 2020, the company generated $653 million of net cash from operating activities compared with the $512 million reported in the year-ago period.

Also, debt and other long-term obligations aggregated $2.67 billion, up from the $1.92 billion witnessed at the end of 2019.

2020 Outlook

Crown Castle has maintained its outlook for 2020. The company expects site-rental revenues of $5,337-$5,382 million. Adjusted EBITDA is projected at $3,479-$3,524 million. Adjusted FFO is projected at $2,572-$2,617 million.

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 International Corporation Price, Consensus and EPS Surprise

Crown Castle International Corporation Price, Consensus and EPS Surprise
Crown Castle International Corporation Price, Consensus and EPS Surprise

Crown Castle International Corporation price-consensus-eps-surprise-chart | Crown Castle International Corporation Quote

We now look forward to the earnings releases of other REITs like Omega Healthcare Investors, Inc. OHI, Vornado Realty Trust VNO and Realty Income Corporation O. All three companies are scheduled to release quarterly numbers on May 4.

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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