Crown Castle International Inc.
) is set to release its fourth-quarter 2012 results after the
market closes on Wednesday, January 23.
In the last quarter, it delivered a break-even earnings
surprise. Out of the last three quarters, the company twice
reported break-even earnings surprises. Let's see how things are
shaping up prior to the announcement.
Factors to Consider this Quarter
Higher usage of smartphones and tablets has forced
four major carriers in the U.S. to continuously upgrade their LTE
networks. Consequently, this may help Crown Castle to bolster its
top-line growth in the fourth quarter.
Moreover, the completion of the tower agreement with T-Mobile
USA will further boost Crown Castle's growth opportunity as they
have gained access to 7,200 wireless towers of T-Mobile USA for a
weighted average term of nearly 28 years.
Despite such strong fundamentals, Crown Castle has a highly
leveraged balance sheet, which may act as a headwind for the
company going forward. Additionally, a continuous change in
technology and higher customer concentration may together exert
further pressure on the company's profitability.
The Zacks Consensus Estimate for the fourth quarter remained
unchanged at 13 cents per share over the last 7 days.
Our proven model does not conclusively show that Crown Castle is
likely to beat the Zacks Consensus Estimate in the fourth
quarter. That is because a stock needs to have both a positive
Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #1
(Strong Buy) or at least Zacks Rank #2 (Buy) or Zacks Rank #3
(Hold) for this to happen. Unfortunately this is not the case
here as elaborated below.
Negative Zacks ESP:
This is because the Most Accurate estimate stands at $0.12 while
the Zacks Consensus is higher at 13 cents. This results in a
difference of negative 7.7%.
Zacks Rank #2 (Buy):
Crown Castle's Zacks Rank of 2, however, increases the predictive
power of ESP. That said we also need to have a positive ESP to be
confident for an earnings surprise call.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
Arris Group Inc. (
has Earnings ESP of a 0.00% and carries a Zacks Rank #2 (Buy). It
is scheduled to report its fourth quarter results on February 25.
SBA Communications Corp.
) will release its fourth quarter results on February 18. It has
Earnings ESP of +28.57% and holds a Zacks Rank #3 (Hold).
MetroPCS Communications, Inc.
)has Earnings ESP of + 53.85% and carries a Zacks Rank #3 (Hold).
It is scheduled to release its fourth quarter results on February
ARRIS GROUP INC (ARRS): Free Stock Analysis
CROWN CASTLE (CCI): Free Stock Analysis
METROPCS COMMUN (PCS): Free Stock Analysis
SBA COMM CORP (SBAC): Free Stock Analysis
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