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Crown Castle (CCI) to Post Q4 Earnings: What to Expect?

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Update time : 2019-05-15 18:02:57

Crown Castle International Corp. CCI is scheduled to liberate fourth-quarter and full-year 2018 results above Jan 23, after the closing bell. The company’s fourth-quarter results are expected to reason year-over-year growth at funds from operations (FFO) per share, also though revenues.

The Houston-based genuine property investment confidence (REIT), which is engaged at operation of wireless communication towers at the United States, surpassed the Zacks Consensus estimate at condition of adjusted funds from operations (AFFO) per portion by 0.72% at the persist reported quarter. Further, results reflected enlarge at place rental revenues.

Over the trailing four quarters, the company surpassed the Zacks Consensus estimate at three occasions and missed at the other. It delivered medium sure surprise of 4.66% during this period. The map below depicts this surprise history:

Crown Castle International company fare and EPS Surprise
 


Crown Castle International company fare and EPS surprise | Crown Castle International company Quote

Let’s visit how things are shaping up foregoing to this announcement.

Factors at Play

With a portfolio of more than 40,000 prison towers, Crown Castle is strong poised to advantage from its shared communication infrastructure assets, at the fourth quarter.

The company’s affair reproduction is predictable though most of its revenues are recurring and below long-term leases with organic growth from hire escalators. Also, it has tower hire agreements with the peak four U.S. carriers — Verizon, AT&T T, Sprint S and T-Mobile TMUS — contributing nearly 74% of its revenues. 

For fourth-quarter 2018, Crown Castle expects place rental revenues of $1,189-$1,199 million. The Zacks Consensus estimate though the identical is pegged at $1,198 million. This indicates an enlarge of nearly 1.2% from the prior-quarter tally. Also, though full-year 2018, management expects place rental revenues of $4,696-$4,706 million. 

However, foregoing to the fourth-quarter earnings release, there was absence of any firm catalyst though becoming overtly optimistic nearly the company’s affair activities and prospects. though such, the Zacks Consensus estimate of FFO per portion though the Oct-Dec district and full-year 2018 remained unchanged at $1.44 and $5.51, respectively, above the past 30 days.

Furthermore, development of new technologies is expected to consume hindered request though place leases also though request though the company’s communications infrastructure. Additionally, frequent changes at request though network services and infrastructure assistance renders volatility to Crown Castle’s revenues.

In fact, network services and other revenues from tiny cells fraction is currently pegged at $3.5 million, representing a autumn of nearly 70% though compared to prior-year tally.

With the oncoming of 5G network, the increasing inspire from traditional backhaul system toward fiber optic cable is expected to consume impacted the company’s performance. Presently, carriers are incurring high costs to furnish high-speed linkages via their fiber-optic cables to prison towers.Although the technique is however at the nascent stages, it has emerged though a chief headwind though Crown Castle.

The company has a significant leveraged rest sheet. Its debt-to-equity ratio of 1.33 is higher than the industry’s medium of 0.88. With a substantial even of indebtedness, the modern rising interest-rate scenario can dent the cell-tower-manager’s bottom-line performance. 

Earnings Whispers

Our proven reproduction does no conclusively appear that Crown Castle’s results will apt strike the Zacks Consensus estimate this quarter. This is though a stock needs to consume both — a positive Earnings ESP and a Zacks degree #1 (Strong Buy), 2 (Buy) or 3 (Hold) — though this to happen. Unfortunately, that is no the example here though elaborated below. You can see the entire catalog of today’s Zacks #1 degree stocks here.

You can disclose the best stocks to buy or sell ago they’re reported with the Earnings ESP Filter.

Earnings ESP: Crown Castle has an earnings ESP of -0.81%.

Zacks Rank: Crown Castle currently has a Zacks degree of 3.

Note: Anything related to earnings presented at this write-up represents funds from operations (FFO) — a widely used metric to criterion the operation of REITs.

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