Cell-tower manager and operator Crown Castle International (NYSE:CCI) reported second-quarter results after Wednesday's closing bell. The company exceeded its own guidance in all of its core financial metrics, albeit not always by much of a margin.

Crown Castle's second-quarter results: The raw numbers


Q2 2018

Q2 2017

Year-Over-Year Change

Site rental revenues

$1.169 billion

$869 million


Net income

$180 million

$112 million


Adjusted funds from operations (AFFO)

$546 million

$440 million


AFFO per share (diluted)




GAAP earnings per share (diluted)




Data source: Crown Castle.

What happened with Crown Castle this quarter?

Three months ago, Crown Castle's second-quarter guidance called for AFFO in the neighborhood of $544 million on roughly $1.16 billion in site rental revenues. The company exceeded both of these targets by a hair.

The company noted that some network service deals that had been expected to generate AFFO profits in the second quarter were pushed to the second half of the year. Crown Castle exceeded its guidance goals without these delayed contributions.

The bulk of Crown Castle's revenue growth in the second quarter stemmed from acquisitions of more towers and small cell sites. New or renewed lease agreements for Crown Castle's active sites, and escalator clauses in existing contracts, accounted for 5.6% of organic year-over-year revenue growth.

Silhouette of a piece of transmission equipment on a cell tower, set against blue skies and fluffy clouds

Image source: Getty Images.

What management had to say

In a prepared statement, Crown Castle CEO Jay Brown reminded investors why his company is focusing on domestic business opportunities rather than chasing international growth.

"Based on our experience, we believe that the U.S. represents the best market in the world for communications infrastructure ownership and we have a differentiated strategy to pursue that compelling opportunity," Brown said. "With the positive momentum we continue to see in our towers and fiber segments, we remain dedicated to investing in our business to generate future growth while delivering near-term dividend per share growth of 7% to 8% per year."

Looking ahead

Based on the second-quarter report and current market trends, Crown Castle tweaked some of its full-year guidance targets slightly upward.

Site rental revenues for the full fiscal year are now seen approaching $4.69 billion, up from $4.66 billion in the first quarter's guidance discussion. Full-year earnings should land near $633 million, up from $629 million in the previous report. Crown Castle's AFFO ambitions held steady at $2.28 billion.

To achieve these full-year goals, Crown Castle believes it can collect approximately $1.18 billion in third-quarter site rental revenues. Net income should stop at $139 million and AFFO is targeted at $573 million at the midpoint of management's guidance range. Hitting these targets would work out to 32% year-over-year revenue growth, 21% higher net income, and a 25% boost to AFFO. Given Crown Castle's rising share count, AFFO per share should increase by a milder 19%.