Higher interest expenses and amortization of deferred financing cost together with net loss on interest rate swap significantly hurt the third quarter results of
Crown Castle International Corp. (
CCI). Net loss for the quarter came in at $36.8 million or 13 cents per share, wider than the Zacks Consensus Estimate of a loss of 3 cents per share. However, third quarter net loss remains almost same compared to a net loss of $37.4 million or 13 cents per share in the prior-year quarter. Quarterly interest expenses and amortization of deferred financing cost was $111.2 million, compared to $88.1 million in the year-ago quarter. Net loss on interest rate swap was $58.3 million, compared to a gain of $2.4 million in the year-ago quarter.
Net revenues of $429.1 million marked an improvement of 12% year over year and also came above the Zacks Consensus Estimate of $416 million. This was primarily due to fabulous performance by the company’s core Site Rental segment. Quarterly adjusted EBITDA was $260.5 million, up 19.7% year over year and also up 5.5% sequentially. Recurring cash flow (adjusted EBITDA less interest expense less sustaining capital expenditures) in the same quarter was $143.8 million, up 16.4% year over year and also up 9.4% sequentially.
Quarterly gross margin was 68.2%, compared to 64.8% in the year-ago quarter. Operating expenses, in the same quarter, were $173.8 million, compared to $172.1 million in the prior-year quarter. This increase in operating expenses was primarily due to higher asset write-down charges.
At the end of the third quarter, Crown Castle had nearly $268.8 million of cash & marketable securities on its balance sheet, compared to $109.5 million at the end of the prior-year quarter. Total debt was approximately $6.14 billion at the end of the same quarter, compared to $6.1 billion at the end of the year-ago quarter. The company generated $124.2 million cash from operation during the reported quarter compared to $129.6 million during the prior-year quarter. Free cash flow (cash flow from operation less capital expenditure) was $91.8 million, compared to a negative ($11) million in the year-ago quarter.
Site Rental Segment
Revenues were $396.5 million, up 12% year over year and also up 5.3% sequentially. Gross margin of this segment was 71%, compared to 67.3% in the prior-year quarter.
Network Services Segment
Revenues were $32.6 million, up 7.4% year over year but down 2.4% sequentially. Gross margin of this segment was 33.7%, compared to 32.4% in the prior-year quarter.
Outlook for the Fourth Quarter of 2009
Management has predicted that site rental revenues during the fourth quarter will approximate a range of $397 million-$402 million. Site rental cost of operation is expected to be approximately $115 million-$120 million. Adjusted EBITDA is forecasted in the $259 million-$264 million range. Interest expense is guided in the range of $117 million-$121 million with sustaining capital expenditure between $10 million - $12 million and recurring cash flow in the range of $129 million-$134 million. Net income/loss, on a GAAP basis, after deduction of dividend on preferred stocks, is expected to be ($15) million- $7 million or (5 cents) – 2 cents per share.
Outlook for Full Fiscal 2010
For the full year 2010, site rental revenues are expected to range between $1,645 million and $1,665 million. Site rental cost of operation is expected to be approximately $460 million-$480 million. Adjusted EBITDA is projected between $1,095 million and $1,115 million. Interest expense is estimated at approximately $448 million-$458 million with sustaining capital expenditure in the range of $27 million-$32 million and recurring cash flow of $612 million-$632 million. Net income/loss, on a GAAP basis, after deduction of dividend on preferred stocks, is expected to be ($16) million-$68 million or (6 cents) – 24 cents per share.
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