Major communication tower operator, Crown Castle International Inc. (CCI), is set to release second-quarter 2014 results after the market closes on Jul 23, 2014.
In the last quarter, the company delivered a negative 3.57% earnings surprise. However, the company has delivered positive earnings surprises in two of the last four quarters, with an average beat of 11.7%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Higher smartphone and tablet usage along with increased deployment of 4G LTE networks have propelled demand for tower requirement by large carriers. This growing trend has benefitted Crown Castle considerably.
However, a highly leveraged balance sheet and the ongoing merger deals between large telecom carriers may act as headwinds for Crown Castle going forward. Moreover, continuous acquisition of towers by the company may further pressurize its cash position. In addition, a continuous change in technology and higher customer concentration may dent the company’s profitability.
Earnings Whispers
Our proven model does not conclusively show that Crown Castle is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below
Zacks ESP: The Most Accurate Estimate stands at 27 cents which is higher than the Zacks Consensus Estimate of 16 cents. This leads to an ESP of +68.75% for Crown Castle.
Zacks Rank #4 (Sell): Crown Castle’s Zacks Rank #4 decreases the predictive power of ESP.
Other Stocks to Consider
Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.
SBA Communications Corp. (SBAC) has an Earnings ESP of +200% and a Zacks Rank #3 (Hold).
CatchMark Timber Trust, Inc. (CTT) has an Earnings ESP of +100.00% and a Zacks Rank #2 (Buy).
Digital Realty Trust Inc. (DLR) has an Earnings ESP of +0.83% and a Zacks Rank #3.
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