According to Colby Synesael of Cowen, CCI reported “messy 4Q19 results due to its decision to restate financials and consequently revised down 2020 AFFO/share guidance by $0.21; otherwise CCI maintained 2020 guidance.” Synesael said the reduction suggests ~3 percent downside to CCI; however, given other concerns, including that CCI now expects 2020 performance to be more back-end loaded, he expected it to be down ~5 percent relative to the broader REIT market.
Jennifer Fritzsche, Senior Analyst with Wells Fargo said there were “many moving parts in Q4’19 print for CCI” driven as a result of the ongoing SEC investigation and ultimate decision to restate historical financials to adhere to different accounting practices.
“Recall, net of the restatement, CCI was the first towerco to provide 2020 guide,” Fritzsche said, “We look for clarity on the puts/takes to expectations net of the financial restatements. With strong Q4’19 results and in-line to slightly higher 2020 guides from CCI’s public towerco peers, we expect the stock to feel some serious pressure tomorrow.
CCI reported Q4 total revenue, Adjusted EBITDA, and AFFO/share of $1.43B, $818MM and $1.38 vs. $1.41B, $803MM and $1.39 y/y. Site rental revenue was $1.30B vs. $1.23B y/y, and organic site rental revenue was 5.9%. Fiber rental revenue was $437MM vs. $411MM y/y, and represented 33.6% of total site rental revenue. Q4 capex was $521MM (vs. Wells Fargo’s estimate of $530MM), including $365MM (70 percent) being allocated to Fiber segment.
Fritzsche said CCI lowered the midpoint of its prior guide for net income, Adjusted EBITDA, and AFFO by -$90MM. Site rental revenue increased however, by +$141MM at the midpoint, as a result of the accounting change. The company expects 2020 organic leasing growth of +6.3 percent, ahead of the +6.1 percent FY2019 restated amount.