Crown Castle International Corp., SpectraSite Holdings Inc. and SBA Communications Corp. reported positive revenues for the second quarter ended June 30, but they did not escape the current telecom shakedown unscathed.
All three companies laid off employees and cut back on general expenses during the quarter, and Crown Castle and SpectraSite shut down certain foreign operations, hoping to ease the burden of decreased carrier spending.
Crown Castle reported revenues for the quarter of $229.4 million, compared with $148.4 million for second-quarter 2000. The company recorded a net loss of $84.7 million, or 49 cents per share, compared with a net loss of $59.2 million, or 43 cents per share, for the same time the previous year.
Houston-based Crown Castle built 389 towers, acquired 732 towers and added 1,631 new tenants, representing an annualized collocation rate of 0.48 tenants per tower on the 13,467 sites owned and managed by the company at the beginning of the second quarter.
To keep in line with revenue estimates that have been negatively impacted during the past several months by equipment delivery delays, the company closed five offices in the United States, cut 275 employees and closed its development office in Brazil, all to help reduce its operating expenses by about $20 million annually.
“We are experiencing delays in the installation of equipment on our sites in the U.K. due to delays in the delivery of equipment from manufacturers to our carrier customers,” said John P. Kelly, chief operating officer of Crown Castle. “These delays are resulting in lower-than-anticipated network service revenues.”
SpectraSite, based in Cary, N.C., fared the poorest of the big four tower companies, coming in slightly below analysts’ expectations. The company reported revenues for the second quarter of $111.9 million, a 44-percent increase from the $77.8 million reported for second-quarter 2001.
However, SpectraSite took a significant loss after it decided to divest its Mexican operation. This resulted in net losses for the quarter of $187 million, or $1.24 per share, compared with a net loss of $38.4 million, or 31 cents per share, for the same time last year.
Steve Clark, president and chief executive officer of SpectraSite, said the decision to divest the Mexican operation was not an easy one.
“We believe this market and much of Latin America will experience strong wireless growth over the next decade. However, our expansion into Mexico was predicated on the assumption that the capital markets would remain open and funding would be readily available for the business,” Clark said.
SpectraSite also cut an undisclosed number of jobs and closed three offices. The company built 220 new towers and acquired 773 towers, 767 of which were from SBC Communications Corp., bringing its total at the end of the quarter to 6,975 towers. The company said it had a colocation rate of 0.40 based on its portfolio of 5,982 towers at the beginning of the quarter.
SBA said its revenues increased 50 percent to $57.8 million from the $38.5 million reported for second-quarter 2000. The company experienced a net loss of $23.3 million, or 50 cents per share, compared with a net loss of $7.9 million, or 20 cents per share, for the same time last year.
Although SBA will not incur it until the third quarter, the company expects to take a charge of $21 million to $24 million, which will include write-off of costs for work in progress for certain new tower build sites that will be abandoned, costs of “employee separation” and the closing of certain, unspecified offices.
SBA said it expects to build approximately 600 to 700 new towers this year, reflecting a decrease in expected new tower builds, due in part to increased success with acquisitions. SBA anticipates it will have 3,800 to 4,000 towers in its portfolio by year-end.
Jeffrey Stoops, SBA’s president, said the right scope of new tower development going forward is being geared toward 100 to 150 towers per quarter.
“We have concluded in the current market environment that it no longer makes sense for us to continue to incur costs necessary to carry an operation which was geared to produce 200 to 250 new towers per quarter,” Stoops said.
SBA’s operational results fell mostly in line with analyst expectations. The company is based in Boca Raton, Fla.
