Crown Castle Inc. (NYSE:CCI) shares surged premarket on Friday after the company disclosed a deal yesterday to sell all of its Fiber segment and announced quarterly results.
Fiber Segment Asset Sale: The company inked a deal to sell its Fiber segment, including supporting assets and personnel, for $8.5 billion.
In particular, EQT Corporation (NYSE:EQT) will acquire the small cells business, while DigitalBridge Group, Inc.‘s (NYSE:DBRG) Zayo will take over the fiber solutions division.
Crown Castle plans to use the proceeds to repay debt and fund a $3.0 billion share repurchase program, aiming to maintain its investment-grade credit rating.
The company expects to reduce its annualized dividend to around $4.25 per share starting in the second quarter of FY25.
After the transaction closes, Crown Castle plans to set its annualized dividend at approximately 75% to 80% of AFFO, excluding amortization of prepaid rent.
Crown Castle expects to grow its annualized dividend in line with the growth in AFFO per share, excluding amortization of prepaid rent, following the transaction’s completion.
With this acquisition, Zayo expects to enhance its network by adding approximately 90,000 route miles of fiber, boosting its total reach to over 70,000 on-net locations.
Alexander Greenbaum, Partner and Head of EQT’s Active Core Infrastructure Advisory team, said, “This investment is a natural fit within EQT Active Core Infrastructure’s strategy – investing behind long-term contracted, core infrastructure assets with strong growth potential.”
The transaction is expected to close in the first half of 2026, pending regulatory approvals. As of December 31, 2024, EQT’s cash and cash equivalent stood at $202.1 million.
Fourth Quarter Results: Crown Castle reported fourth-quarter FFO of $1.80, slightly missing the $1.81 estimate, while sales came in at $1.65 billion, exceeding the $1.64 billion estimate.
Site rental revenue remained broadly flat year over year at $1.60 billion. Adjusted EBITDA declined slightly to $1.04 billion from $1.08 billion in prior year quarter.
As of December 31, 2024, Crown Castle’s cash and cash equivalent stood at $295 million.
FY25 Outlook: Crown Castle expects AFFO per share of $4.06 – $4.17. The company sees site rental revenue of $3.987 billion – $4.032 billion, site rental billings of $3.885 billion – $3.915 billion and adjusted EBITDA of $2.755 billion – $2.805 billion.
Steven Moskowitz, Chief Executive Officer of Crown Castle, said, ”In 2025, we expect a consistent level of activity with organic growth of 4.5% in towers, excluding the impact of Sprint consolidation churn, and anticipate lease and amendment applications to increase year-over-year as our customers continue to add capacity to their 5G networks to meet the persistent growth in mobile data demand in the U.S.”
Investors can gain exposure to the stock via iShares U.S. Digital Infrastructure and Real Estate ETF (NYSE:IDGT) and Global X Data Center & Digital Infrastructure ETF (NASDAQ:DTCR).
Price Action: CCI shares are up 6.24% at $101.02 premarket at the last check Friday.
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