Crown Castle, the largest U.S. tower owner, said network upgrades by Verizon Wireless, AT&T Mobility and Sprint Nextel boosted earnings in the third quarter of 2011. For the quarter, recurring cash flow increased 12% to $199 million. Recurring cash flow is defined as adjusted earnings before interest, taxes, depreciation and amortization less interest expense and sustaining capital expenditures.
“We had an excellent third quarter, exceeding the high-end of our outlook for site rental revenue, site rental gross margin, adjusted EBITDA and recurring cash flow,” said Crown Castle president and CEO Ben Moreland. “Further, the contribution from the network services portion of our business exceeded our expectations, delivering the highest contribution to gross margin in its history.”
Total revenue for the third quarter of 2011 increased 7% to $514 million. Site rental revenue also increased 7%, to $469 million. Site rental gross margin, defined as site rental revenue less site rental cost of operations, increased 8% to $347 million.
Crown Castle made an upward revision to its estimate for cash flow growth this year, saying it now expects annual recurring cash flow per share growth of 18% for 2011. Recurring cash flow per share, defined as recurring cash flow divided by diluted weighted average common shares outstanding, grew 13% to 70 cents in the third quarter of 2011.
“During the third quarter, we invested approximately $280 million in activities around our core business,” said Crown Castle CFO Jay Brown. The company spent $111 million on land purchases, $89 million of which was a single transaction through which Crown Castle purchased its ground leases.
