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Crown Castle's (CCI) Q1 AFFO & Revenues Surpass Estimates

Crown Castle Inc. CCI reported first-quarter 2024 adjusted funds from operations (AFFO) per share of $1.72, outpacing the Zacks Consensus Estimate by a penny. However, the reported figure declined 9.9% from the year-ago quarter.

Results reflect better-than-anticipated revenues. However, higher interest expense on debt obligations and lower contributions from adjusted EBITDA were undermining factors. CCI maintained its outlook for 2024.

Net revenues of $1.64 billion, too, beat the Zacks Consensus Estimate of $1.63 billion. However, the figure fell 7.4% year over year.

Quarter in Detail

During the first quarter, CCI’s site-rental revenues came in at $1.59 billion, down 2.2% from the prior-year quarter. The organic contribution of $17 million to the site rental billings reflected 1.2% growth and was not materially impacted by the Sprint Cancellations. Our estimate for site-rental revenues was pegged at $1.56 billion.

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On the other hand, services and other revenues plunged 64.4% year over year to $53 million.

CCI’s quarterly operating expenses decreased 3.7% year over year to $1.1 billion. The operating income fell to $538 million from $628 million recorded a year ago. The quarterly adjusted EBITDA of $1.04 billion slipped 6.2%. We estimated the metric to be $1.08 billion.

Interest expense on debt obligations rose 12.6% year over year to $223 million.

The company reported capital expenditures of $320 million in the quarter. This comprised discretionary capital expenditures of $298 million and sustaining capital expenditures of $22 million. Discretionary capital expenditures primarily attributable to Fiber were around $259 million, and those to Towers were roughly $33 million.

Balance Sheet

Crown Castle exited the first quarter of 2024 with cash and cash equivalents of $125 million, up from $105 million reported as of Dec 31, 2023.

Moreover, debt and other long-term obligations aggregated $22.56 billion as of Mar 31, 2024, increasing 2.1% sequentially.

2024 Guidance

Crown Castle maintained its guidance for 2024 AFFO per share in the range of $6.85-$6.97. The Zacks Consensus Estimate is pegged at $6.92, which is within the guided range.

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.

Crown Castle currently carries a Zacks Rank #4 (Sell).

Crown Castle Inc. Price, Consensus and EPS Surprise

Crown Castle Inc. Price, Consensus and EPS Surprise
Crown Castle Inc. Price, Consensus and EPS Surprise

Crown Castle Inc. price-consensus-eps-surprise-chart | Crown Castle Inc. Quote

Upcoming Earnings Releases

We now look forward to the earnings releases of other REITs like Alexandria Real Estate Equities ARE and Welltower WELL, slated to report on Apr 22 and Apr 29, respectively. Meanwhile, Ventas VTR is scheduled for May 1.

The Zacks Consensus Estimate for Alexandria’s first-quarter 2024 FFO per share is pegged at $2.32, implying a 5.9% year-over-year increase. ARE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Welltower’s first-quarter 2024 FFO per share is pegged at 94 cents, suggesting a year-over-year rise of 10.6%. WELL currently carries a Zacks Rank #3.

The Zacks Consensus Estimate for Ventas’ first-quarter 2024 FFO per share stands at 75 cents, indicating a 1.4% rise year over year. VTR currently has a Zacks Rank #3.

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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