Crown Castle’s Positive Performance
Despite a 5% decline in revenue, which reached $1.67 billion during the quarter (surpassing estimates of $1.65 billion), Crown Castle experienced noteworthy growth in its primary business of site rental revenue. Site rental revenue rose by 1.6% to $1.6 billion, offsetting the decline in service revenue.
Additionally, the company expanded its infrastructure, adding 8,000 new small cell nodes in the previous quarter, with plans to bring another 2,000 online in the first quarter.
In terms of bottom-line metrics, Crown Castle outperformed estimates in adjusted funds from operations (AFFO), a crucial measure for REITs. AFFO fell slightly from $1.85 to $1.82, but it surpassed the consensus estimate of $1.79.
However, other bottom-line metrics, including generally accepted accounting principles (GAAP) and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), also experienced a decline.
CFO Dan Schlanger expressed confidence in the company’s performance, stating, “The growth delivered in 2023 across towers, small cells, and fiber solutions demonstrates our customers’ continued demand for our assets, and we are well positioned to execute on our expectations for 2024.”
Looking ahead to 2024, Crown Castle projects site rental revenues within a range with a midpoint of $6.37 billion, representing a 2% decline from 2023. Furthermore, the company anticipates an 8% decrease in AFFO, with a projected figure of $6.91.
While this guidance may appear underwhelming, it is essential to note that Crown Castle’s stock experienced a significant downturn in 2023 due to rising interest rates. However, investors are optimistic that falling rates will contribute to the company’s growth prospects this year.