Crown Castle International Inc.’s (CCI) – the second-largest tower company afterAmerican Tower Corporation (AMT) – reported its first-quarter 2013 adjusted earnings per share of 5 cents meeting the Zacks Consensus Estimate. The company also raised its fiscal 2013 financial guidance mainly based on the upgrading of LTE networks from all four major carriers in the U.S.
Net profit
Quarterly GAAP net income was approximately $15.5 million or 5 cents per share compared with a profit of $50.0 million or 17 cents per share in the year-ago quarter.
Revenues
Net revenue in the quarter increased 34.1% year over year to $740.1 million, surpassing the Zacks Consensus Estimate of $688 million. This was mainly due to improved performance by both the Site Rental and the Network Services segment.
Margins
Gross margin in the first quarter was 65.5% compared with 72.0% in the year-ago quarter. Operating income was $235.0 million compared with $202.3 million in the prior-year quarter. Quarterly adjusted EBITDA was approximately $440.8 million, representing a year-over-year upside of 22.4%.
Cash Flow
During the first quarter of 2013, funds flow from operations (:FFO) was $214.6 million compared with $190.5 million in the prior-year quarter. FFO per share in the reported quarter was 73 cents compared with 67 cents in the year-ago quarter. Quarterly adjusted funds flow from operations (:AFFO) was $291.2 million compared with $198.3 million in the previous quarter. AFFO per share in the reported quarter was $1.00 compared with 69 cents in the year-ago quarter. During the reported quarter, Crown Castle bought 0.3 million common shares for $23.6 million at an average price of $69 per share.
Balance Sheet
At the end of the first quarter of 2013, Crown Castle had cash & marketable securities of approximately $160.9 million on its balance sheet compared with $441.4 million at the end of 2012. Total debt was approximately $10,741.3 million at the end of the reported quarter versus $10,923.2 million at the end of 2012. At the end of the reported quarter, the debt-to-capitalization ratio was 0.78 versus 0.79 at the end of 2012.
Site Rental Segment
Quarterly revenue was $615.4 million, up 23.7% year over year. Gross margin for the segment was 71.1% compared with 75.3% in the prior-year quarter.
Network Services Segment
Quarterly revenues were $124.6 million, up by a massive 129.9% year over year. Gross margin for the segment was 37.9% compared with 41.9% in the prior-year quarter.
Management Outlook for the second Quarter of 2013
Crown Castle expects Site Rental revenues in the range of $612 million to $617 million. Site Rental cost of operation is projected in the band of $179 million to $184 million. Adjusted EBITDA is anticipated between $426 million and $431 million. Site Rental gross margin is anticipated to be between $430 and $435 million. Interest expense (inclusive of amortization) is estimated in the $138 million to $143 million range. FFO is estimated in the range of $255 million to $260 million. AFFO is estimated in the $274 million to $279 million range. Net income is expected in the range of $23 million to positive $63 million or 8 cents to 22 cents per share.