It has been about a month since the last earnings report for Crown Castle (CCI). Shares have added about 4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Crown Castle due for a pullback? 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 Surpasses Q1 FFO & Revenue Estimates
Crown Castle’s first-quarter 2019 AFFO per share of $1.45 compares favorably with the prior-year figure of $1.36. Further, the figure surpassed the Zacks Consensus Estimate of $1.43.
Results reflect benefits from the company’s extensive tower portfolio, high demand for infrastructure and healthy leasing activity. The year-over-year increase in bottom line reflects growth in site rental revenues.
Net revenues for the reported quarter amounted to $1.43 billion and marked 9.8% year-over-year growth. Moreover, the reported figure outpaced the Zacks Consensus Estimate of $1.39 billion.
Site rental revenues came in at $1,219 million, up 6% year over year, which included organic growth, as well as contributions from straight-lined revenues. Particularly, site rental revenues during the January-March quarter recorded 5.7% organic growth, driven by strong new leasing activity, as well as contracted tenant escalations. Additionally, services and other revenues came in at $207 million, significantly up 41.8% year over year.
Quarterly operating income increased around 10% from the prior-year quarter to $384 million. However, operating expenses escalated 9.7% year over year to $1.04 billion. Quarterly adjusted EBITDA was approximately $821 million, representing year-over-year increase of 8%.
Cash Flow and Liquidity
Crown Castle exited first-quarter 2019 with cash and cash equivalents of $245 million, down from the $277 million reported at the end of 2018. Furthermore, as of Mar 31, 2019, the company generated around $512 million of net cash from operating activities compared with $452 million reported in the year-ago period.
Also, debt and other long-term obligations aggregated approximately $17.1 billion, up from $16.6 million witnessed at the end of 2018.
During the March-end quarter, Crown Castle paid common stock dividend of $1.125 per common share, up approximately 7% from the year-earlier quarter.
Crown Castle has reiterated its outlook for full-year 2019. The company expects site rental revenues of $4,939-$4,984 million. Adjusted EBITDA is anticipated in the band of $3,344-$3,389 million.
Meanwhile, FFO is anticipated in the $2,293-$2,338 million range, while AFFO is projected at $2,413-$2,458 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
At this time, Crown Castle has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. 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.
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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