Cellular tower giant Crown Castle raised its financial outlook for the year after reporting second-quarter results that edged analysts’ projections.
The company reported nearly $1.17 billion in revenue from site rentals, as well as adjusted earnings of $769 million. Wall Street forecasters had anticipated $1.16 billion in rental revenues and $765 million in earnings, according to a note from Wells Fargo analysts.
“As the volume of data delivered by both wireless and wired networks continues to grow, our customers are increasing the capacity of their networks by leasing access to our towers and fiber, which in turn generates growth in our cash flows,” Crown Castle CEO Jay Brown said, according to a transcript of the company’s earnings call.
Guggenheim Partners analyst Robert Gutman wrote in a research note that the strong site leasing numbers stemmed from a $9 million “straight-line benefit … from contract term extensions with its top customer.”
Wells Fargo, meanwhile, added that a higher straight-line adjustment and increased contributions from network services prompted the company to raise its estimates for site rental revenues for the full year.
Crown Castle officials also bolstered its projected full-year adjusted earnings and net income forecasts, while the projection for adjusted funds from operations remained stable.
The company reported $546 million in second-quarter adjusted funds from operations — which met Wall Street expectations — while its $393 million in capital expenditures eclipsed analysts’ anticipated $373 million.
Wells Fargo’s note pointed out that organic leasing growth edged up in the latest quarter, while the company’s fiber segment contributed a higher-than-expected $398 million to its site rental numbers.
“We believe we’re in the very early innings of a huge opportunity with fiber, which has become critical for wireless and wired networks,” Brown said.