Crown Castle (NYSE:CCI) announced operational changes on Tuesday and updated its FY24 outlook. The company, which operates and leases cell towers and is a telecom infrastructure Real Estate Investment Trust (REIT), stated that it now expects its adjusted funds from operations (AFFO) to be in the range of $6.91 to $7.02 per share. This is higher than its prior AFFO outlook of $6.85 to $6.97 per share. AFFO measures the financial performance of a REIT.
CCI’s Updated FY24 Outlook
Furthermore, CCI has now projected its adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) to be in the range of $4.14 billion to $4.19 billion, compared to its previous guidance of $4.14 billion to $4.18 billion.
Additionally, the company aims to improve its capital efficiency by reducing discretionary capex for its Fiber business segment by $275 million to $325 million and intends to reduce staffing by over 10%. These cuts in capex and other operational savings, mainly in the Fiber segment and corporate departments, are likely to generate $100 million in annualized cost savings, with $60 million expected to benefit its FY24 results.
CCI’s Changes to the Operating Plan
Earlier this year, Crown Castle began a strategic and operational review of its Fiber segment, which provides fiber optic internet access to customers. While the strategic review is still ongoing, the company has completed the operational review and is implementing changes. This review identified significant future demand for enterprise fiber and small cells near its 90,000 miles of high-quality fiber in 48 of the top 50 U.S. cities. A small cell is a relatively inexpensive radio access point that can be deployed indoors or outdoors.
Is CCI a Good Investment?
Analysts remain sidelined about CCI stock, with a Hold consensus rating based on three Buys and nine Holds. Year-to-date, CCI has declined by more than 10%, and the average CCI price target of $111.55 implies an upside potential of 11% from current levels.
