Crown Castle said its capital expenditures during the quarter were $341 million
Crown Castle reported revenues its site rental revenues reached $1.62 billion in the first quarter of the year, climbing 3% compared to the year-ago quarter, the company said in its earnings statement.
The company’s net profits for Q1 totaled $418 million, slightly down from $421 million in Q1 2022.
Capital expenditures during the quarter were $341 million, comprised of $15 million of sustaining capital expenditures and $326 million of discretionary capital expenditures, the company said.
“We continue to see positive underlying demand trends as 5G has developed across the U.S., driving first quarter results that were in line with our expectations. We expect our near-term results to be impacted by a combination of the Sprint network rationalization and a higher interest rate environment, which will result in minimal dividend growth in 2024 and 2025, despite strong projected underlying growth throughout our business,” the company’s CEO, Jay Brown, said in a conference call with investors.
“Growth in our business has consistently been driven by our customers investing in their networks with the deployment of more spectrum and cell sites to keep pace with the rapid growth and mobile data demand. The need for substantial investment in networks has persisted from 2G through 5G,” Brown said.
The executive also noted that Crown Castle expects its customers’ investment in the 5G field to exceed what they had spent to deploy 4G. “Since we are still in the early innings of 5G, we believe these positive underlying demand trends will support our ability to sustain at least 5% organic tower revenue growth and continued acceleration in our small cell business.”
Brown also said that the company could potentially evaluate to expand to new markets where carriers need to deploy small cells depending on the business conditions.
“The vast majority of the activity thus far as related to where we own our fiber is in those top 30 markets. We’ve seen some activity outside of that and certainly believe that the carriers will build and need to build small cells beyond the top 30 markets in the U.S. probably all the way out to the top 100 and beyond,” Brown said.
“And our willingness to play there will come down to what we believe are the return opportunities there. And if we think its highest and best use, then we’ll continue to follow the carriers there, but we’ll have to wait and see as that that opportunity developed,” the executive added.
Crown Castle EVP and CFO Dan Schlanger confirmed that the company aims to bring a total of 10,000 small cells on air this year, up from 5,000 in 2022.
Schlanger said that the company expected the cancellations as a consequence of the T-Mobile U.S.-Sprint consolidation will result in some movements in the financial results that are not typical for its business. “Our expectation for the full year impact from Sprint cancellations remains unchanged with non-renewals of approximately $30 million.”
