Crown Castle International
), the leading communication tower operator in the U.S., to beat
expectations when it reports its first-quarter 2013 results after
the market closes on Apr 24, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Crown Castle is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP
: Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is +200.00%. This is a
meaningful and leading indicator of a likely positive earnings
Zacks #3 Rank (Hold)
: Crown Castle currently has a Zacks Rank #3. Note that the
stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) and 3 (Hold) have
a significantly higher chance of beating the earnings.
The combination of Crown Castle's Zacks Rank #3 (Hold) and
+200.00% ESP makes us confident of a positive earnings beat on
Apr 24, 2013.
What is Driving the Better-Than-Expected
Crown Castle is expected to benefit from the unprecedented
adaptation of smartphones, which has propelled the demand for
towers by large carriers. Additionally, continuous amendment of
the LTE networks by the four major U.S. carriers will help Crown
Castle to bolster its top line in the first quarter.
Acquisition of 7,200 T-Mobile USA towers has extended Crown
Castle's reach in the top 100 markets in the U.S. and the company
will profit from the excess leasing capacity available in those
Despite such strong fundamentals, Crown Castle has a highly
leveraged balance sheet, which may act as a headwind for the
company going forward. Additionally, continuous change in
technology and higher customer concentration may exert further
pressure on the company's profitability.
Other Stocks to Consider
Other companies which can be considered on the basis of our
model, and which have the right combination of elements to post
an earnings beat this quarter are as follows:
Research in Motion Limited
) currently has an Earnings ESP of +100.00% and holds a Zacks
Rank #2 (Buy).
Sprint Nextel Corporation
) has an Earnings ESP of +20.00% and holds a Zacks Rank #3
) has an Earnings ESP of +6.25% and carries a Zacks Rank #3
AMER TOWER CORP (AMT): Free Stock Analysis
RESEARCH IN MOT (BBRY): Free Stock Analysis
CROWN CASTLE (CCI): Free Stock Analysis
SPRINT NEXTEL (S): Free Stock Analysis Report
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