Crown Castle International reported a strong third quarter with all major carriers contributing to its growth. The comm-infra company, which experienced growth across all of its segments: towers, small cells and fiber, also painted an upbeat picture of its 2019 expectations.
“We delivered another terrific quarter of results in the third quarter and increased our annualized common stock dividend by 7 percent to $4.50 per share based on accelerating leasing activity,”
CCI has portfolios of more than 40,000 towers, 35,000 small cells and 65,000 route miles of dense, high-capacity fiber in the top U.S. markets, in areas it foresees the greatest long-term demand from multiple customers. The triple play of towers, small cells and fiber are the key to the company’s growth now and in the future, said Jay Brown, Crown Castle’s CEO in a Seeking Alpha transcript of the third quarter earnings call. https://seekingalpha.com/article/4212546-crown-castle-international-corp-cci-ceo-jay-brown-q3-2018-results-earnings-call-transcript
“Our strategy to invest in towers and small cells and fiber has positioned us to capture accelerating leasing activity which is driving dividend growth,” Brown said “We believe our ability to offer towers, small cells and fiber solutions, which are all integral components of communications networks and are shared among multiple tenants, provides us the best opportunity to generate significant growth while delivering high returns for our shareholders.”
Small cells leasing growth will hockey stick up to $75 million in 2019, more than 35 percent higher than the $55 million expected in 2018. Small cell construction, which grew 40 percent from last year, is expected to continue during the next 18 to 24 months.
“This increased activity is a result of all four of our large customers investing in their networks through towers and small cells to both keep pace with the current 4G demand environment and position their networks for 5G,” Brown said.
Tower Rental Prospects
In 2019, new leasing activity is expected to be a $125 million for towers in 2019, up from a $110 million in 2018.
CCI can increase the yield on its fiber investment by serving both small cells and enterprise fiber customers with the same outside plant. “The current utilization of our fiber portfolio is similar to that of a single tenant tower. Our current 8-percent yield is more than double what we saw when our towers had only one tenant,” Brown said.
Site Rental Revenue
Organic site rental revenues grew $52 million or 5.8 percent year over year, comprising 8.4 percent growth from new leasing activity and contracted tenant escalations, minus 2.6 percent from tenant non-renewals.