Crown Castle International Reports Q3-18

There is a really old saying 'round where I live - "Never ask a man where he's from. If he is from Texas, he'll tell you. If he ain't - you will just embarrass him". . . . and I'm getting the same impression about asking a fellow investor about earnings releases in some sectors.

REITs in general are simple enough. But cell tower and data center earnings releases are a horse of a different color. It was bad enough when Yahoo Finance produced an earnings number based on FFO. Now, Yahoo provides EPS numbers. Nasdaq provides for CCI an earning number that is right in the middle of the CCI guidance for AFFO and FFO.

The dividend was increased 7% year over year. That is well beneath the pace of growth for FFO, AFFO and revenue per share. "Revenue per share" is not one of the metrics that the brokerage analysts write about. But in doing my own private pondering on growth - specifically for the higher growth companies with increases in share counts - it is a metric I like to use in generating my assessments.

7% dividend growth is well below the three year trend of 9.35%. I would have an expectation that 7% would disappoint 'the street'.

Here is the earning summary from AP:

Crown Castle International Corp. (CCI) on Wednesday reported a key measure of profitability in its third quarter. The results topped Wall Street expectations.

The real estate investment trust, based in Houston, said it had funds from operations of $579 million, or $1.39 per share, in the period.

The average estimate of seven analysts surveyed by Zacks Investment Research was for funds from operations of $1.38 per share.

Funds from operations is a closely watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization.

The company said it had net income of $136 million, or 33 cents per share.

The operator of wireless communications towers, based in Houston, posted revenue of $1.38 billion in the period, also beating Street forecasts. Eight analysts surveyed by Zacks expected $1.35 billion.

For the current quarter ending in December, Crown Castle expects its per-share funds from operations to range from $1.42 to $1.44.

The company expects full-year funds from operations in the range of $5.48 to $5.50 per share.

The company's shares have dropped almost 4 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 5 percent. In the final minutes of trading on Wednesday, shares hit $106.79, a rise of slightly more than 5 percent in the last 12 months.

Here are the projections from Nasdaq:

Yearly Earnings Forecasts

Fiscal Year End	Consensus EPS* Forecast	High EPS* Forecast	Low EPS* Forecast	Number of Estimates	Over the Last 4 Weeks Number of Revisions Up ----- Down
Dec 2018	5.24	5.26	5.22	6	1	0
Dec 2019	5.74	5.85	5.67	6	0	1
Dec 2020	6.26	6.41	6.11	2	0	0

Quarterly Earnings Forecasts

Fiscal Quarter End	Consensus EPS* Forecast	High EPS* Forecast	Low EPS* Forecast	Number of Estimates	Over the Last 4 Weeks Number of Revisions Up ----- Down
Sep 2018	1.32	1.32	1.31	6	1	0
Dec 2018	1.37	1.39	1.35	6	1	0
Mar 2019	1.40	1.42	1.38	3	0	0
Jun 2019	1.41	1.43	1.39	3	0	0
Sep 2019	1.45	1.46	1.44	3	0	0

So there is 11% 'earnings' growth projected for 2019 and 9% growth projected for 2020.

Here is my spreadsheet for CCI's Q3-18:

CCI	Crown_Castle---------------	Q3-2018	Q2-2018	Q1-2018	Q4-2017	Q3-2017	Q2-2017	Q1-17	Q4-2016	Q3-2016	Q2-2016	Q1-2016	Q4-2015	Q3-2015
	FFO	515	525	447	429,302	408,422	404,626	400,945	386,875	369,922	356,429	316,295	410,271	357,828
	FFO/share	1.24	1.26	1.09	1.05	1.03	1.11	1.11	1.10	1.09	1.05	0.94	1.23	1.07
	AFFO	579	546	558	551,797	458,537	439,907	450,162	406,402	415,832	392,478	395,152	372,223	356,350
	AFFO/share	1.39	1.31	1.36	1.25	1.15	1.20	1.24	1.15	1.23	1.16	1.18	1.11	1.07
	Share Count	416	416	410	408,130	397,035	365,832	361,727	352.878	338,409	338,609	334,929	334,320	333,711
The Q3-17 Lightower Finance acquisition, due to an increasing share count, lowered 2017 projected AFFO from $4.99 (in Q2-17) to $4.645 - with a 2018 projection of $5.50
	Midpoint FFO Outlook	4.964	4.889	4.938	4.865	4.415	4.485	4.525	4.515	4.515	4.200	4.30	4.24	4.47
	Midpoint AFFO Outlook	5.489	5.50	5.495	5.495	4.645	4.995	5.025	5.025	5.010	4.710	4.695	4.680	4.300
	Revenue	1,375	1,330	1,153	1,238,090	1,063,238	1,038,335	1,015,942	1,032,416	992,016	962,409	934,384	945,836	918,107
	Revenue/share	3.31	3.20	2.81	3.03	2.68	2.84	2.81	2.93	2.93	2.84	2.79	2.83	2.75
	FFO/share to Rev/share	37.5%	39.5%	38.8%	34.6%	38.4%	39.1%	39.5%	37.5%	37.2%	37.0%	33.7%	43.5%	38.9%
	AFFO/share to Rev/share	42.0%	40.9%	48.4%	41.3%	42.9%	42.3%	44.1%	39.2%	42.0%	40.8%	42.3%	39.2%	38.9%
	Property + Equipment	13,433	13,218	13,051	12,923,885	10,599,604	10,507,736	10,293,693	9,805,315	9,714,149	9,670,358	9,559,397	9,580,057	9,498,568
	Goodwill	10,074	10,075	10,075	10,021,468	6,905,922	6,919,358	6,530,001	5,757,676	5,750,033	5,744,681	5,531,064	5,513,551	5,527,134
	Intangible assets	5,620	5,729	5,854	5,961,759	3,885,311	3,953,812	3,894,362	3,650,072	3,737,448	3,779,957	3,707,129	3,779,915	3,837,360
	Total Investments	29,127	29,022	28,980	28,907,112	21,390,857	21,380,906	20,748,056	19,213,063	19,201,670	19,194,996	18,797,590	18,873,523	18,863,062
	Debt	16,313	15,844	15,616	16,044,369	15,090,217	13,726,333	13,380,091	12,069,393	12,491,596	12,325,859	11,778,176	12,043,740	12,039,178
	Other LT Liabilities	2,732	2,678	2,615	2,554,037	2,200,336	2,169,070	2,131,076	2,087,299	2,028,672	2,002,944	1,975,135	1,948,636	1,859,304
	Debt + LT Liabilities	19,045	18,522	18,231	18,598,406	17,290,553	15,895,403	15,511,167	14,156,692	14,520,268	14,328,803	13,753,311	13,992,376	13,898,482
	Interest Expense	160	157	160	160,280	154,146	141,769	134,487	129,362	129,916	129,362	126,378	128,346	129,887
	Adjusted EBITDA	793	769	763	707,012	604,802	588,543	581,412	574,617	564,120	549,669	539,120	539,797	529,158
	LTM EBITDA	3,032	2,844	2,663	2,481,769	2,349,377	2,308,695	2,269,818	2,225,526	2,192,706	2,157,744
	Debt/LTM EBITDA calc	6.28x	6.51x	6.85x	7.49x	7.36x	6.88x	6.83x	5.42x	6.62x	6.64x
	4x EBITDA	3,172	3,076	3,052	2,828,048	2,419,208	2,354,172	2,325,648	2,298,468	2,256,480	2,198,676	2,156,480	2,159,188	2,116,632
	Debt/4x EBITDA calc	6.00x	6.02x	5.97x	6.58x	6.24x	5.83x	5.75x	5.25x	6.43x	6.52x	6.38x	6.48x	6.57x
	Reported Debt/EBITDA	5.1x	5.2x	5.1x	5.6x	3.6x	5.8x	5.8x	5.6x	5.6x	5.6x	5.5x	5.1x	5.7x
	Rpt interest coverage	5.0x	4.9x	4.8x	4.4x	4.0x	4.2x	4.4x	4.5x	4.5x	4.4x	4.4x	4.4x	4.4x
	Interest Coverage calc	4.96x	4.90x	4.77x	4.41x	3.92x	4.15x	4.32x	4.44x	4.34x	4.25x	4.27x	4.21x	4.07x
	FFO/Investments Ratio	7.07%	7.24%	6.17%	5.94%	7.63%	7.56%	7.73%	8.05%	7.71%	7.43%	6.73%	8.70%	7.59%
	Reported Wt Av Interest	3.9%	3.9%	3.9%	4.0%	4.0%	4.1%	4.0%	4.1%	4.0%	4.1%	4.1%	3.8%	4.0%
	S&P Credit Rating	BBB-	BBB-	BBB-	BBB-	BBB-	BBB-	BBB-	BBB-	BBB-	BBB-	BBB-	BBB-	BB+