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Sep 30, 2022
Crown Castle Q3 2022 Earnings Report
Reported strong results, increased common stock dividend, and provided outlook for full year 2023.
Key Takeaways
Crown Castle reported strong Q3 2022 results with an 8% increase in site rental revenues and a 6.5% increase in the annualized common stock dividend. The company is optimistic about 5G development and expects continued growth in the Towers segment. Challenges include higher interest rates and Sprint network rationalization.
Site rental revenues grew by 8% compared to Q3 2021, driven by organic contribution and straight-lined revenues.
Income from continuing operations increased to $419 million, compared to $351 million in Q3 2021.
Adjusted EBITDA grew by 10% to $1.1 billion, primarily due to growth in site rental revenues and higher services contribution.
AFFO and AFFO per share both grew by 5% compared to Q3 2021, reaching $804 million and $1.85, respectively.
Crown Castle
Crown Castle
Crown Castle Revenue by Segment
Revenue by Segment
Site Rental Revenue
CapyFin.comServices and Other Revenue
CapyFin.com Forward Guidance
Crown Castle provided its full year 2023 outlook, anticipating growth in site rental revenues, adjusted EBITDA, and AFFO. The outlook includes impacts from Sprint Cancellations and rising interest rates.
Positive Outlook
- Expected growth in site rental revenues from $6,242-$6,287 million in 2022 to $6,488-$6,533 million in 2023.
- Anticipated Adjusted EBITDA between $4,449 and $4,494 million in 2023.
- Projected AFFO between $3,296 and $3,341 million in 2023.
- Expected acceleration in small cell deployments to approximately 10,000 in 2023.
- Organic Contribution to Site Rental Billings during 2023 of approximately 7%.
Challenges Ahead
- Includes certain impacts from the expected small cell and fiber solutions lease cancellations related to the previously disclosed T-Mobile US. Inc. (“T-Mobile”) and Sprint network consolidation (“Sprint Cancellations”).
- Impact of Sprint Cancellations impacts run-rate site rental revenues by $30 million.
- Includes approximately $50 million in expected accelerated amortization of prepaid rent from the remaining deferred revenues associated with the Sprint Cancellations.
- Expected increase in expenses includes approximately $20 million in higher labor-related and other operating expenses associated with the higher inflationary environment.
- Expected growth in full year 2023 AFFO includes the impact of approximately $120 million to $160 million of additional interest expense related to higher expected interest rates.
Revenue & Expenses
Visualization of income flow from segment revenue to net income