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Crown Castle Signs Deal to Sell Fiber Segment, Misses AFFO Estimates
CCKCrown Holdings(CCK) ZACKS·2025-03-14 13:30

Core Insights - Crown Castle Inc. (CCI) announced an agreement to sell its small cells and fiber solutions business for 8.5billion,leadingtoamorethan48.5 billion, leading to a more than 4% increase in its shares [1][2] - The transaction is expected to close in the first half of 2026, subject to regulatory approvals, with EQT Active Core Infrastructure fund acquiring the small cells business and Zayo Group Holdings Inc. purchasing the fiber solutions business, each for 4.25 billion [2] - Following the sale, Crown Castle plans to implement a 3billionsharerepurchaseprogramandanticipatesareductioninitsannualizeddividendtoapproximately3 billion share repurchase program and anticipates a reduction in its annualized dividend to approximately 4.25 per share by Q2 2025 [3] Financial Performance - For Q4 2024, CCI reported adjusted funds from operations (AFFO) per share of 1.80,missingtheZacksConsensusEstimateof1.80, missing the Zacks Consensus Estimate of 1.82, and down 1.1% year over year [4] - Net revenues for Q4 2024 were 1.65billion,exceedingtheZacksConsensusEstimateof1.65 billion, exceeding the Zacks Consensus Estimate of 1.63 billion but falling 1.5% year over year [4] - Total site-rental revenues declined 0.4% year over year to 1.597billioninQ42024,whilefull−yearsite−rentalrevenuesdecreased2.71.597 billion in Q4 2024, while full-year site-rental revenues decreased 2.7% to 6.36 billion [5] Revenue Breakdown - Services and other revenues for Q4 2024 were 52million,down26.852 million, down 26.8% from the prior-year quarter, but higher than the estimate of 49.2 million [6] - Full-year services and other revenues were 210million,asignificantdecreaseof53.2210 million, a significant decrease of 53.2% from 449 million in the previous year [6] - Adjusted EBITDA for Q4 2024 was 1.04billion,down31.04 billion, down 3% year over year, with a full-year adjusted EBITDA of 4.2 billion, reflecting a decline of 5.8% [7] Financial Position - Crown Castle ended 2024 with cash and cash equivalents of 119million,anincreasefrom119 million, an increase from 105 million at the end of 2023 [8] - Total debt and long-term obligations reached 23.47billionasofDecember31,2024,markinga6.323.47 billion as of December 31, 2024, marking a 6.3% year-over-year increase [8] Future Guidance - For 2025, CCI expects AFFO per share to be in the range of 4.06-4.17,withsiterentalbillingsprojectedbetween4.17, with site rental billings projected between 3.885 billion and 3.915billion[9]−AdjustedEBITDAfor2025isestimatedtobebetween3.915 billion [9] - Adjusted EBITDA for 2025 is estimated to be between 2.755 billion and 2.805billion[9]−TheFibersegmentwillbeclassifiedasadiscontinuedoperationstartingQ12025,withanexpectedlossofaround2.805 billion [9] - The Fiber segment will be classified as a discontinued operation starting Q1 2025, with an expected loss of around 800 million in Q1 2025 and a total loss between 700millionand700 million and 900 million for the full year [10]