Crown Castle Falls, Outlook Strong – Analyst Blog

Yesterday after closing bell, Crown Castle International Inc. (CCI) declared first quarter 2010 financial results. Quarterly net loss was $124.5 million or a loss of 43 cents per share compared to a net income of $5.4 million or 2 cents per share in the year-ago quarter. This was primarily due to $73.3 million of net losses from interest rate swaps and $66.4 million of net losses from repayments, purchases and early retirement of debt.

 

However, excluding those above special charges, first quarter adjusted EPS was a loss of 12 cents, higher than the Zacks Consensus Estimate of a loss of 10 cents. In the after- market trade on NYSE, stock price of Crown Castle was 13 cents (0.35%).

 

Quarterly net revenue was more than $444.3 million, an improvement of 10.3% year-over-year and slightly above the Zacks Consensus Estimate of $442 million. This was mainly due to fabulous performance by the company’s core Site Rental segment.

 

Quarterly adjusted EBITDA was $274.3 million, up 13.1% year-over-year. Recurring cash flow (adjusted EBITDA less interest expense less sustaining capital expenditures) in the same quarter was $148.9 million, up 13% year-over-year.

 

Quarterly gross margin was 68.5% compared to 67.3% in the year-ago quarter. Operating expenses, in the same quarter, were $173.9 million, remains same year-over-year. Lower asset write-down charges were offset by higher General & Administrative charges.

 

Crown Castle generated $84.3 million cash from operation during the first quarter 2010 compared to $118.1 million in the prior-year quarter. Quarterly free cash flow (cash flow from operation less capital expenditure) was $25.6 million compared to $78.8 million in the year-ago quarter.

 

At the end of the first quarter of 2010, Crown Castle had nearly $397.5 million of cash & marketable securities on its balance sheet compared to $766.2 million at the end of the previous year. Total debt was approximately $6.39 billion at the end of the first quarter 2010 compared to $6.58 billion at the end of the previous year.

 

 

Quarterly revenue was $406.9 million, up 10.7% year-over-year. Quarterly gross margin for this segment was 72% compared to 70.2% in the prior-year quarter.

 

 

Quarterly revenue was $37.5 million, up 6.3% year-over-year. Quarterly gross margin of this segment was 29.8% compared to 37.4% in the prior-year quarter.

 

 

Management has predicted that site rental revenue during the second quarter will be approximately within the range of $406 million-$411 million. Site rental cost of operation is expected to be approximately $114 million-$119 million. Adjusted EBITDA is forecasted in the $271 million-$276 million range. Interest expense is guided in the range of $119 million-$122 million with sustaining capital expenditure between $7 million – $9 million and recurring cash flow in the range of $142 million-$147 million. Net income/loss, on a GAAP basis, after deduction of dividend on preferred stocks, is expected to be $15 million- ($3) million or $0.05 – ($0.01) per share.

 

 

For the full year 2010, site rental revenue is guided in a range of $1,660 million-$1,675 million. Site rental cost of operation is expected to be approximately $460 million-$475 million. Adjusted EBITDA is guided within $1,110 million-$1,130 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 $598 million-$618 million. Net income/loss, on a GAAP basis, after deduction of dividend on preferred stocks, is expected to be $6 million-($51) million or $0.02 – ($0.18) per share.