Crown Castle increases full-year outlook on strong Q2 earnings

Crown Castle International Corp. (CCI) increased its 2011 outlook after reporting better-than-expected second-quarter earnings. The company increased its outlook for site rental revenue by $20 million, site rental gross margin by $17 million, adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) by $28 million, and recurring cash flow by $27 million.
The tower company now expects full-year site rental revenue to be between $1.84 billion and $1.85 billion. Net income (after deducting dividends on preferred stock) for the full year could be between $90 million and $167 million under the updated outlook.
Total revenue for the second quarter increased 10% to $500 million. Site rental revenue ticked up 12% ($47 million) from the year-ago period to $457 million, while site rental gross margin increased 14% ($42 million) to $336 million in the second quarter. Adjusted EBITDA increased 14% ($40 million) to $320 million. Crown Castle reported a net income attributable to stockholders of $31 million, compared to a net loss of $98 million in the year-ago period.
“We had an excellent second quarter, exceeding the high-end of our outlook for site rental revenue, site rental gross margin, Adjusted EBITDA and recurring cash flow,” stated Ben Moreland, president and CEO. “As reflected in our results, we enjoyed solid growth in our core business, driven largely by the evolution to 4G networks and the continued growth in mobile Internet use. This growth in our core business resulted primarily from amendment activity from existing tenants. Further, the contribution from our services business exceeded our expectations. Based on our strong second-quarter results and our expectations for the remainder of 2011, we have raised our full-year 2011 outlook.”
Crown said it invested $64 million in capital expenses during the second quarter. Of that amount, $30 million was spent purchasing land, $5 million of sustained capital expenses and $29 million on revenue-generating capital expenses. Of the $29 million, $19 million was spent on existing sites and $10 million spent on new construction.
The company increased its revolving credit facility capacity to $450 million during the quarter and during the last four months, has spent $180 million purchasing its own common stock.