Continuing LTE network rollouts drove Crown Castle’s revenues up 26% year-over-year to $735 million, but its income took a large hit from taxes.
Ben Moreland, president and CEO of Crown Castle, said that the company “saw a significant increase in leasing activity as all four major carriers in the US continued upgrading their networks for LTE and capacity enhancements. In fact, revenue from tenant additions approximately doubled in the second quarter of 2013, compared to the second quarter of 2012, reflecting the shift in activity towards network densification as carriers strive to improve network quality and to add capacity through cell-splitting to meet the increasing demand for mobile technology.”
Crown Castle’s site rental revenue was up 19% from the same period in 2012, to $99 million; while its site rental gross margin (site rental revenue minus the cost of site operations) was up 13% to $438 million compared to the prior year’s period.
However, net income plunged year-over-year on tax charges, to $52 million from $116 million in the same period of 2012. The income tax charge totaled $37 million for the quarter, while the previous year’s quarter had included an income tax benefit of $68 million. Income before income taxes, the company reported, was $90 million during the quarter, up from $49 million during the prior year’s period — but the tax charge masked that growth.
Crown Castle reported that it spent $138 million on capital expenses during the quarter, including $27 million in land purchases, $10 million for “sustaining capital expenditures” and $101 million on capex for generating revenues — which included $66 million on existing sites and $35 million on new sites, which the company said were primarily small cell networks.
Jay Brown, CFO for Crown Castle, described the period as “a terrific quarter” and said the company had raised its outlook for the full year. Crown Castle estimated that its site rental revenues for the third quarter will be between $617-$622 million, with net income between $28 million-$68 million.