Crown Castle Co., Ltd. (CCIMore – Free Report) will release its fourth quarter and full year 2022 results after the closing bell on January 25. Quarterly results may reflect year-over-year growth in earnings per share and funds under management (FFO).
In its last reported quarter, the Houston, Texas-based real estate investment trust (REIT)’s adjusted FFO per share exceeded the Zacks Consensus estimate by 1.09%. Higher site rental income driven by increased demand for tower space supported the top line.
Over the past four quarters, CCI’s FFO per share has consistently beaten expectations, averaging 2.26%. This is shown in the graph below.
Factors to watch out for
Advances in mobile technologies such as 4G and 5G networks and the proliferation of bandwidth-hungry applications are driving global mobile data usage. The proliferation of network-intensive applications for video conferencing, cloud services, and remote work scenarios are also fueling the rise.
As a result, in the fourth quarter, tower REITs, such as Crown Castle, reported higher earnings as wireless service providers and operators continued to expand their networks and install additional equipment into their existing networks to increase network coverage. , may have taken advantage of the growing demand for tower leasing. and capacity.
Amid this surge in demand, Crown Castle’s long-term leases (typically 5 to 15 years) with top U.S. carriers have strong credit profiles, supporting site rental income this quarter. is expected.
The consensus estimate for net revenues from site rentals was pegged at $1.57 billion for the quarter, representing 6.8% growth from the reported value for the prior-year quarter. Our estimate for the same is $1.57 billion.
The consensus forecast for net revenues from the Network Services and Other segment for the fourth quarter was $175 million, representing a decline of 2.8% from last year’s reported value. Our estimate is $185.5 million.
The Zacks Consensus estimate for fourth-quarter revenue is pegged at $1.75 billion, representing a 5.7% year-over-year increase. Our estimate is $1.75 billion.
Additionally, CCI is likely to deploy 5,000 nodes by the end of 2022 to bolster its small cell offerings needed to boost wireless network capacity and density for 5G deployments.
In October 2022, Crown Castle increased its dividend payout from $1.47 to $1.565 per share, representing a 6.5% increase.
Nonetheless, streamlining of some of Sprint’s legacy networks by T-Mobile, one of Crown Caste’s main customers, and higher interest expense could have been a headwind for the company during the fourth quarter. there is.
The Zachs consensus forecast for quarterly FFO per share was unchanged last month at $1.83. However, it suggests an increase of 3.4% from the reported value for the same period last year.
For the full year, the Zachs consensus estimate for FFO per share remains unchanged at $7.36 last month. Nonetheless, the figure represents a 5.9% increase from the figures reported last year.
What our quantitative model predicts
Our tried-and-true model is not a definitive predictor of Crown Castle’s FFO beats at this time. Properly combining her two key ingredients of positive earnings ESP and Zack Rank 3 (Hold) or higher increases her chances of winning. But that’s not the case here.
Revenue ESP: Crown Castle’s earnings ESP is -1.09%. Earnings ESP filters help you find the best stocks to buy or sell before they’re reported.
Zack Rank: Crown Castle currently has Zacks Rank 3. Here is the complete list of today’s #1 (strong buy) Zachs stocks..
Strains to watch
Here are some stocks worth considering from the REIT sector. Our model shows that they have the right mix of elements to surprise in this reporting cycle.
Highwoods Property (HIW – Free Report is scheduled to release its fourth quarter earnings on February 7. HIW’s revenue ESP is currently +0.41% and Zacks ranks #3.
Equinix (EQIX – Free Report will report quarterly figures on February 15th. EQIX’s revenue ESP is currently +0.54% and Zacks ranks #3.
stag industrial (male only – Free Report will report quarterly figures on February 15th. STAG has a revenue ESP of +2.89% and is currently #2 in Zacks rank (buy).
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Note: Everything related to earnings in this article refers to fund from operations (FFO). This is a widely used metric to measure REIT performance.