SpectraSite Inc. kicked off wireless tower company first-quarter earning releases this week on a positive note.
The company said revenues for the first quarter were $84.6 million and operating income was $21.4 million. Net income, after expenses, was $7.1 million, or 15 cents per share, for the quarter. Adjusted EBITDA (which SpectraSite defines as earnings before depreciation, amortization and accretion, interest income tax expense and, if applicable, before discontinued operations and cumulative effect of change in accounting principle) was $45.2 million. Net cash from operating activities was $27.8 million, and free cash flow was $21.5 million. SpectraSite said it owned or operated 7,582 towers as of March 31.
“Through focus, diligence and sheer hard work, our operating teams continue to exceed their goals,” said Stephen Clark, president and chief executive officer. “The results they have achieved clearly have placed our company ahead of where we thought we would be at this point during the year and, as a result, we are increasing our guidance for the balance of 2004.”
Indeed, the company now expects to report 2004 site leasing and licensing revenues to be between $342 million and $348 million, up from prior guidance of $336 million to $341 million.
Analysts reacted happily to the news, with Raymond James & Associates Inc. increasing its year-end 2004 price target for SpectraSite to $48, noting the company’s better-than-expected results. Raymond James also increased its 2004 valuation free cash flow per share estimate from $2.38 to $2.61 and its 2005 valuation free cash flow per share estimate from $2.88 to $3. Shares of SpectraSite were trading up at $41.25 per share at press time Thursday.
Other tower company stocks were also performing well Thursday morning, with American Tower Corp. trading at $13.40 per share, Crown Castle International Corp. trading at $15.67 per share, and shares of SBA Communications Corp. trading up more than 5 percent at $4.57.
Earlier in the week, analysts from Bear Stearns & Co. Inc. introduced year-end 2005 price targets for both American Tower and Crown. The firm set both companies’ year-end 2005 price targets at $21, noting “strong expected operating performance raising its run rate cash flow, anticipated further net leverage reduction, and a resulting reduced cost of capital,” for each.
