As tower companies’ second-quarter earnings begin to roll in, three firms posted net losses last week, but industry analysts said the companies are on the right track and most rate the stocks as strong buys. In addition, a merger proposal between two tower firms gained shareholder approval and looks set to close this week.
SBA Communications Corp. announced its second-quarter results, reporting revenues of $63.2 million, a 12.2-percent increase from the second quarter of 2004 when the company reported revenues of $56.3 million. Nevertheless, the firm reported a net loss of $26.3 million, or 38 cents per share, compared with a net loss of $26.6 million, or 47 cents per share, in the year-ago period.
SBA, which owned 3,138 towers across the United States as of June 30, stated its site-leasing revenue grew 10 percent compared with last year’s second quarter, and its tower cash flow increased 15 percent. Site leasing contributed 95.4 percent of the company’s total segment quarterly operating profit, SBA said.
The company wrote off $8.2 million related to deferred financing fees and extinguishment of debt charges.
Crown Castle
Crown Castle International Corp. announced its second-quarter earnings, reporting a net loss of $227.5 million, which includes $198.5 million in losses caused by the early retirement of debt. Last year, the company reported a net loss of $50.8 million during the second quarter.
Net loss was $1.09 per share, which includes 91 cents per share in losses caused by the early retirement of debt. Last year during the second quarter, net loss was 27 cents per share.
The company, which owns 11,000 wireless communications towers in the United States and 1,300 in Australia, said its U.S. site rental revenue totaled $133.5 million, an increase of 10.3 percent compared with last year’s second-quarter site-rental revenue of $121 million.
The company said it completed a $275 million credit facility under which the company can borrow for general corporate purposes, including capital expenditure acquisitions and common stock purchases and dividends.
Global Signal
Global Signal Inc. announced a net loss of $9.4 million, or 16 cents per share, during its second quarter. Last year during the same quarter, Global Signal reported net income of $4.1 million, or 9 cents per share.
The company reported total revenues of $77.9 million for the second quarter, a 79-percent increase from the $43.5 million the company reported for the second quarter of 2004.
The company closed a deal in late May with Sprint Corp., pre-paying rent of $1.2 billion for the ability to lease or operate 6,600 towers for 32 years. Earlier in May, the company issued 6.3 million shares of common stock at $30.70 per share, which brought in $183 million, 75 percent of which was used to finance the Sprint deal.
American Tower, SpectraSite
American Tower Corp. and SpectraSite Inc. announced that their respective stockholders have approved the transaction for the companies to merge. The companies expect the merger to close on or about Aug. 8.
In the deal, the two companies agreed to a stock-for-stock exchange, whereby stockholders of SpectraSite will receive 3.575 shares of American Tower stock for each share of SpectraSite stock.
Boston-based American Tower owns, operates and develops broadcast and wireless communication sites in North America, with 14,800 towers spanning the United States, Mexico and Brazil. SpectraSite, based in North Carolina, owns about 10,000 revenue-producing wireless tower sites and provides service for Cingular Wireless L.L.C., Nextel Communications Inc., Sprint Corp., T-Mobile USA Inc. and Verizon Wireless.
