Crown Castle International Inc. (CCI) declared better than expected fourth quarter 2009 financial results. Quarterly net income was $13 million or 4 cents per share compared to a net loss of $69 million or a loss of 24 cents per share in the year-ago quarter. Fourth quarter EPS of 4 cents was significantly higher than the Zacks Consensus Estimate of a loss of one cent. This was primarily due to higher revenue and a net gain on interest rate swap.
Quarterly net revenue was more than $443.5 million, an improvement of 13% year-over-year and also above the Zacks Consensus Estimate of $436 million. This was mainly due to the fabulous performance by the company’s core Site Rental segment. Quarterly adjusted EBITDA was $263.6 million, up 17% year-over-year and also up 1.2% sequentially. Recurring cash flow (adjusted EBITDA less interest expense less sustaining capital expenditures) in the same quarter was $132.2 million, up 5.7% year-over-year and down 8.7% sequentially.
Quarterly gross margin was 66.9% compared to 65.3% in the year-ago quarter. Operating expenses, in the same quarter, were $177.4 million, remained the same year-over-year. Lower asset write-down charges were offset by higher depreciation, amortization, & accretion charges.
The company generated $571.3 million cash from operation during fiscal 2009 compared to $513 million during the previous year. Yearly free cash flow (cash flow from operation less capital expenditure) was $397.7 million compared to $62.3 million in the previous year. At the end of fiscal 2009, Crown Castle had nearly $766.2 million of cash & marketable securities on its balance sheet compared to $155.2 million at the end of the previous year. Total debt was approximately $6.58 billion at the end of fiscal 2009 compared to $6.1 billion at the end of the previous year.
Site Rental Segment
Quarterly revenue was $402.6 million, up 13% year-over-year and also up 1.5% sequentially. Quarterly gross margin of this segment was 70.6% compared to 67.8% in the prior-year quarter.
Network Services Segment
Quarterly revenue was $40.9 million, up 10.6% year-over-year and up 25.6% sequentially. Quarterly gross margin of this segment was 31.3% compared to 41.4% in the prior-year quarter.
Management Outlook for the First Quarter of 2010
Management has predicted that site rental revenue during the first quarter will approximate a range of $403 million-$408 million. Site rental cost of operation is expected to be approximately $113 million-$118 million. Adjusted EBITDA is forecasted in the $267 million-$272 million range. Interest expense is guided in the range of $119 million-$124 million with sustaining capital expenditure between $6 million – $8 million and recurring cash flow in the range of $137 million-$142 million. Net income/loss, on a GAAP basis, after deduction of dividend on preferred stocks, is expected to be ($72) million- ($42) million or ($0.25) – ($0.15) per share.
Management Outlook for Full Fiscal 2010
For the full year 2010, site rental revenue is guided to a range of $1,645 million-$1,665 million. Site rental cost of operation is expected to be approximately $460 million-$480 million. Adjusted EBITDA is guided to be $1,095 million-$1,115 million. Interest expense is estimated at approximately $476 million-$486 million with sustaining capital expenditure in the range of $27 million-$32 million and recurring cash flow of $583 million-$603 million. Net income/loss, on a GAAP basis, after deduction of dividend on preferred stocks, is expected to be ($60) million-$2 million or ($0.21) – $0.01 per share.
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