Wireless tower operator Crown Castle International (CCI) has seen its performance boosted by the increasing number of carriers offering unlimited data to customers while increasing connectivity generally looks set to boost demand for the foreseeable future.
Q2 results last week showed no let up in growth with revenues up 8%, net income up 30% and adjusted funds fom operations (AFFO) rising 12%. Additionally the company raised guidance with AFFO now to increase 13% to $1.82bn.
With a market cap of $36.3bn that puts the valuation on a multiple of 20x AFFO with a yield of 3.83%. Not bad for a REIT with significant growth prospects.
The cell tower business continues to benefit frowm increasing connectivity with smart phones and unlimited data plans being the main drivers. While the rate of user growth is now slowing in the US it is still expected to increase by 20% by 2021. However, overall the mobile data requirement is expected to increase four fold over the same period.
CCI also reported the acquisition of Lightower which will boost AFFO by a further c.$400 million and increase the fiber network footprint significantly in preparation for the roll out of next generation 5G wireless technology.
Jay Brown, Crown Castle’s Chief Executive Officer, summed it all up quite nicely at the call;
"We had another terrific quarter exceeding our previously provided Outlook for net income, Adjusted EBITDA and AFFO. We believe we are well-positioned to capitalize on the long-term positive fundamentals for mobile data demand growth with our leading portfolio of shared wireless infrastructure across towers and small cells. As the wireless carriers turn to our infrastructure to improve and enhance their networks to meet what is expected to be a four-fold increase in mobile data demand by 2021, we believe there is a sustained runway of organic growth opportunities on our existing portfolio as well as opportunities for us to make accretive investments that enhance our long-term growth profile."
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Submitted July 25, 2017 at 01:37AM by InterestingNews1 http://ift.tt/2v1XHVj
